The Best Assets To Own: A Comprehensive Overview

Generally speaking, each dollar that you save can be deployed toward one of the following assets: cash, commodities/hard assets, bonds/fixed income, real estate, and stocks/business ownership. Below, I discuss the characteristics and historical performance of each asset class and I list my view of the best assets to own in ascending order:

Worst Asset Class: Cash And Cash-Equivalents

Cash is, by definition, designed to erode in value. The Federal Reserve of the United States has a stated target of 2-3% inflation (depending on the year), meaning that every dollar in your pocket will only buy $0.97 or $0.98 worth of goods this time next year as you can purchase right now. Since 1964, the purchasing power of the United States dollar has decreased in value by a factor of 7.7, making cash just about the worst asset to own over the long term. If you put $1,000 into a safety … Read the rest of this article!

Investing Secrets: Four Ways To Overcome Fear

Investing Secrets: Four Ways To Overcome Fear

One of my general goals for writing finance articles, which I am going to focus on specifically in 2017, is to point out that fear arising from a stock price drop in a profitable business is one of the most self-destructive emotions that you can carry with you as you go through your investing life.
The good news is that there are four ways you can overrule those worst instincts that act as the devil sitting on your shoulder telling you to sell low. I discuss them below.

I. Liquidity

According to a recent white paper published by The Northern Trust, a risk assessment survey indicated that investment portfolios with 15% cash only has a one in ten chance of experiencing a 25% or greater decline in net worth between now and 2025. A back-test indicated that such an investor would have seen … Read the rest of this article!