Investment Strategy
Although capitalization-weighted index funds are the industry standard, there are several advantages to equal-weighted index funds that make them worth a close look for adding to your portfolio. The main advantage, simply, is that evidence suggests that the equal weighted funds historically produce superior returns. But the reasons why are … [Read more...]
The cyclically-adjusted price-to-earnings (CAPE) ratio of a stock market is one of the standard metrics used to evaluate whether a market is overvalued, undervalued, or fairly-valued. This metric was developed by Robert Shiller and popularized during the Dotcom Bubble when he argued (correctly) that equities were highly overvalued. For that … [Read more...]
Calculating the sum of future discounted cash flows is the gold standard to determine how much an investment is worth. This guide show you how to use discounted cash flow analysis to determine the fair value of most types of investments, along with several example applications. You can either start here from the beginning, or jump to the … [Read more...]
One of the most commonly mixed-up concepts in investing is the difference between market volatility and market risk. Many people treat them identically, which is a mistake. And you can profit from that mistake. One way to look at it is this: Risk is the probability that an investment will result in permanent or long-lasting loss … [Read more...]
It's often said that time is money, but I don't think that's precise enough. The way I see it, energy is money. The more you can accomplish in a certain amount of time, and the more "hustle" you have in general, the more you can get done and the more you'll want to do. You can create more, learn more, travel more, give more, and love … [Read more...]