tag:blogger.com,1999:blog-79108260927594585662024-11-08T10:35:46.680-05:00An Intelligent Approach to InvestingUnknownnoreply@blogger.comBlogger11125tag:blogger.com,1999:blog-7910826092759458566.post-52134787179916888412010-03-17T01:29:00.012-04:002010-03-18T23:02:02.959-04:00

I mentioned in another post why retail investors are called the dumb money that emotion is one of the three reasons why individual investors are preyed upon by Wall Street. If an investor acts while under an emotional state, it virtually guarantees that they will take actions that will be detrimental to their investing success. There is an inverse correlation between emotions and investment

Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-7910826092759458566.post-33025478179858025632010-03-15T21:55:00.005-04:002010-03-18T23:03:30.877-04:00

The average investor often makes the mistake of holding on to their losers too long and selling their winners too soon. Let’s break this down to analyze each activity separately. Investors hanging on to losers for too long Investors tend to hold on to their losing investments for three reasons: 1) They view a paper loss as temporary and are still hoping for a turnaround. 2) They can’t stand

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-42898061317195124862010-03-14T03:19:00.006-04:002010-03-18T22:55:41.336-04:00

Below is a piece of advice I was fortunate to be the recipient of that had a major impact on my investing results. I want to share this with you because I’m convinced you’ll benefit tremendously. The more you rely on other people’s opinion, the less you know. The more you know, the less you need to rely on other people’s opinions. At first glance, it seems rather simple and straightforward,

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-10836039499947173132010-03-11T21:27:00.021-05:002010-03-18T22:54:52.259-04:00

When people buy and sell items on eBay, they don’t just focus on price; they also look at the value of the items they’re buying and selling. Those who are better at assessing value usually have the upper hand. They can buy items at a discount to market value and can turn around and sell the same item at a higher price for a profit. This is also common in the real estate market. Investors who

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-31911540344621415862010-03-10T23:38:00.017-05:002010-03-18T22:51:40.071-04:00

According to Maslov, after physiological and safety needs are fulfilled, the third layer of human needs involve feelings of belongingness. We generally need to feel a sense of belonging and acceptance and this need can be fulfilled by being part of a large social group such as a club, community center or sports team. The social setting can also be smaller and more intimate such as the one among

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-22626978014292407202010-03-09T18:50:00.028-05:002010-03-23T08:50:16.595-04:00

Overconfidence is best illustrated by this survey of car drivers where 80% of the respondents rated themselves as above-average drivers. Of course, statistically it’s impossible for 8 persons out of 10 to be above-average. I’m sure you won’t be surprised to learn that a similar survey carried out among investors produced similar results. Excessive trading Studies in behavioral finance show

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-640559803211616652010-03-09T08:33:00.012-05:002010-03-18T22:48:12.310-04:00

Beginner investors pay a heavy price for their lack of knowledge, blind faith and eagerness to follow the crowds. Think of investors who bought into the Internet mania and got their life savings decimated by the ensuing market crash. Think of American homeowners who ruined their retirement years by using their home equity to buy investment properties during the real estate boom in 2006-07

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-6298542300771502702010-03-09T08:26:00.013-05:002010-03-18T22:47:27.454-04:00

Successful people understand that the path to success is often found as a result of mistakes made along the way. Mistakes are simply a way for life to tell us that we’re not headed in the right direction and to adjust our aim accordingly. They're not meant to tell us that we should give up on our dreams but unfortunately, too many people misinterpret these signals as a STOP sign. Many investors

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-81887045603238992342010-03-07T21:22:00.014-05:002010-03-18T22:44:20.880-04:00

On Wall Street, the institutional investors are referred to as the Smart Money and retail or individual investors are called the Dumb Money. While I don’t agree with Wall Street’s designation of institutional investors as being smart, it's difficult to argue against their view of retail investors. Retail investors are called the Dumb Money mainly for the three reasons outlined below. Chasing

Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7910826092759458566.post-74124448260108060852010-03-07T19:24:00.018-05:002010-03-18T22:42:31.755-04:00

If you’re planning a picnic next Saturday, the first thing you would do is check the weather forecast. If the weather forecast for Saturday is mainly sunny and 0% chance of rain, you’d feel comfortable going ahead with your plans. What if it's now Wednesday morning and the weather forecast for Saturday has changed to variable cloudiness with a 20% probability of rain, what would you do? You'd

Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-7910826092759458566.post-8390132436547712672010-03-07T19:06:00.058-05:002010-03-18T22:40:53.346-04:00

Let’s say you have a solid understanding of the telecom, banking and home renovation sectors. You currently own or are interested in buying companies like Rogers, TD Bank and Rona because you understand the industries they’re in. In other words, it’s clear for you what your area of knowledge is or what is within your circle of competence. What would you do if you turn on your TV and hear a money

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