Wealth Building Strategies

Bullish on the Canadian Economy? This Stock May Be Your Best Bet

Posted by Andrew Button

on Thursday, 5 December 2019 9:41

2019 has been a good year for the markets, with stocks hitting record highs in both the U.S. and Canada.

Despite mixed economic data, the markets appear to be pricing for future growth.

In the most recent quarter, GDP limped along at just 0.1% year over year, while recent data showed that the economy shed 1,800 jobs last month.

These signals indicate a fairly tepid macro environment, but that doesn’t mean it can’t turn around. In fact, investors as a whole seem to be betting that it will. If you’re one of them, here’s a stock that could be a solid pick….CLICK for complete article

Never Forget These 10 Investment Rules

Posted by Richard Rosso

on Wednesday, 4 December 2019 9:10

A motive of the financial industry  is to blur the lines between investor and trader. I’m convinced it’s to make investors feel guilty for taking control of their portfolios. After all, Wall Street firms ares the experts with YOUR money.

How dare you question them?

Sell to take profits, sell to minimize losses, purchase an investment that fits into your risk parameters and asset allocations; it’s all enough to brand one as ‘trader’ in the buy & forget circles  that are paid to push the narrative that markets are on a permanent trek higher and bears are mere speed bumps. Wall Street has forgotten the financial crisis. You can’t afford such a luxury.

And, if you’re a reader of RIA, you’re astute enough to know better.

“You’re a trader now?”

Broker at a  big box financial shop.

A planning client called his financial partner to complete two trades. Mind you, the only trades he’s made this year. His request was to sell an investment that hit his loss rule and purchase a stock (after homework completed on riapro.net). His broker was dismayed and asked the question outlined above.

Investors are advised – Be like Warren Buffett and his crew: You know, he’s buy and hold, he never sells! Oh, please. CLICK for complete article

The Difference Between Investing & Speculation (10-Investing Rules)

Posted by Lance Roberts

on Monday, 25 November 2019 9:55

Are you an “investor” or a “speculator?” 

In today’s market the majority of investors are simply chasing performance. However, why would you NOT expect this to be the case when financial advisers, the mainstream media, and WallStreet continually press the idea that investors “must beat” some random benchmark index from one year to the next.

But, is this “speculation” or “investing?” 

Think about it this way.

If you were playing a hand of poker, and were dealt a “pair of deuces,” would you push all your chips to the center of the table?

Of course, not.

The reason is you intuitively understand the other factors “at play.” Even a cursory understanding of the game of poker suggests other players at the table are probably holding better hands which will lead to a rapid reduction of your wealth.

Investing, ultimately, is about managing the risks which will substantially reduce your ability to “stay in the game long enough” to “win.” 

Robert Hagstrom, CFA penned a piece discussing the differences between investing and speculation:

“Philip Carret, who wrote The Art of Speculation (1930), believed “motive” was the test for determining the difference between investment and speculation. Carret connected the investor to the economics of the business and the speculator to price. ‘Speculation,’ wrote Carret, ‘may be defined as the purchase or sale of securities or commodities in expectation of profiting by fluctuations in their prices.’”

Chasing markets is the purest form of speculation. It is simply a bet on prices going higher rather than determining if the price being paid for those assets are selling at a discount to fair value….CLICK for complete article

13 Stocks With The Highest Returns On Equity

Posted by Wayne Duggan

on Thursday, 31 October 2019 9:32

Return on equity is one of the most popular ways for investors to assess the efficiency of a business before they buy a stock. Return on equity is a measure of profitability relative to shareholder’s equity.

Return on equity is calculated by dividing net income by the company’s assets minus its debt. In other words, return on equity is the ratio of net income to net assets.

Why Is It Important?

In practical terms, return on equity and return on assets are two different indicators of how well a company’s management is using its assets. Like ROA, ROE varies widely from industry to industry, but it’s a quick way to measure efficiency among a group of peers in the same business.

For example, if one auto company has an ROE that is half as high as a competitor, it may be a sign that management should consider restructuring the business or updating its assets. A low ROE could be a sign that a company needs to divest unproductive assets to counter a potentially bloated balance sheet….CLICK for complete article

The 5-Laws Of Human Stupidity & How To Be A “Non-Stupid” Investor

Posted by Lance Roberts

on Thursday, 3 October 2019 6:31

This past weekend, I was digging through some old articles and ran across one that needed to be readdressed on “human stupidity” as it relates to investing.

The background was a study done in 1976 by a professor of economic history at the University of California, Berkeley. Carol M. Cipolla published an essay outlining the fundamental laws of a force he perceived as humanity’s greatest existential threat: Stupidity.

Stupid people, according to Cipolla, share several identifying traits:

  • they are abundant,
  • they are irrational, and;
  • they cause problems for others without apparent benefit to themselves

Of course, if we look at the world around us today, watch or read the diatribe produced by financial and news outlets, or pay attention to politics, it certainly seems that since the advent of the “smartphone” and “social media” the percentage of “stupidity” has clearly risen. (Either that, or we are just more aware of the massive amount of “stupidity” around us. Thankfully, it seems to be contained primarily in Florida.)

We can’t really do much about the seemingly rising level of “general stupidity,” however, we can apply Cipolla’s five basic laws of human stupidity to investing and the mistakes investors repeatedly make over time….CLICK for complete article