Defining Standard Deviation Standard deviation refers to the fluctuation in the value of your portfolio. The ups and downs of a portfolio can be thought of as a roller coaster. How scary is the roller coaster? A roller coaster that is … Continue reading
Yearly Archives: 2016
In Short Probably. I would generally not suggest taking out a loan to create a portfolio (although I did exactly that once). The Investment Returns Cannot Be Counted Upon to be Higher Than the Loan Interest It would make sense … Continue reading
In Short As a portfolio gets larger, the growth occurs on an expanding base, which means the amount of growth you experience each year is increasing. Compounding means you are earning money on your past earnings. For Example Say you … Continue reading
Introduction If you look at a security, there is a lot of noise. Every day the security goes up and down, sometimes by a few cents and sometimes by many dollars. If you average out all those prices, you get … Continue reading
Overview All companies on the stock market are required to provide information on their company to the public. They are required to provide financial statements (income statement, balance sheet, statement of cash flows). See previous post for information on those … Continue reading
Determine An Inventory Of Your Situation Think of it like a balance sheet in accounting if you are familiar with the set up. List all your assets at fair market value. Then list all your debts, amounts AND interest rates. Finally list … Continue reading
The market roared ahead this month and now has hit an all-time high. The Dow went up 502 points (2.8%). The S&P went up 75 points (3.6%). The Russell 2000 (small cap companies that I like) went up 68 points … Continue reading
Quick Definition Over time things gets more expensive. A dollar today can buy less stuff than a dollar 30 years ago, and it can buy more stuff than a dollar 30 years from now. Inflation means the purchasing power of … Continue reading
Definition Opportunity Cost is the value of the best alternative choice that you decide to forego. Example 1 You are trying to decide whether or not to wake up early tomorrow to go for a run or to sleep in. … Continue reading
What are Taxes? Think of the government as a giant company. By living in the country, we are in essence agreeing to buy all of the goods and services that the company (the government) provides. The taxes are the payment. … Continue reading