What is a reason why stock prices of a particular company falls down lower than historical norms would suggest? One reason is when there is a general feeling in the air that, Amazon, Alphabet, or any of the remaining wave of new-age tech companies has a change of disrupting the company’s industry and core profit engine.
But, by the same token, it also stands to reason that one of the best places to find an investment is an industry where the investor community believes that disruption is likely to occur but, in fact, will not cause the scope of disruption that is anticipated.
This is arguably one of the most important investing principles to every apply correctly as it can result in wealth far beyond what you would ever expect. From 1956 through 2003, the old Philip Morris (now Altria, Philip Morris International, Mondelez, and a portion of Kraft-Heinz) delivered … Read the rest of this article!
I recently received this comment and question from reader “DB”, and once I saw that my response had crossed the 1,000 word threshold, I decided it was worthy of its own post. The question is about why it can be inadvisable to jump into the market all at once upon receiving some kind of windfall. Specifically, here is what DB had to say:
“Hello Tim – Thanks for this article! I like your writing style. I am just now constructing a dividend portfolio and it has been quite the learning process. I am wondering if you can address a question I have on building the portfolio regarding actually making purchases. I have seen a few authors caution the new dividend investor to not buy all your stock picks at once but to make the transition over time. Why is this? I assume the authors are telling us to identify the
… Read the rest of this article!
I have spent some time recently reading the BiggerPockets investor forum, which is probably the most well-known tool for amateur and new real estate investors to learn about the process and presumably ask those with more experience for the lessons they have learned along the way.
While I do consider the internet to be a better, more educational place because the Bigger Pockets world exists, I should note that there are many contributors who understate costs, provide ethically dubious recommendations, are generally under-knowledgeable about what advice they give, and sometimes exhibit a certain naivete regarding whe actions that people being forced out of their homes (such as via foreclosure) may take on the way out.
I have compiled of some of my most notable criticisms that I would encourage any frequent user of the forum to keep in mind when browsing:
1. Most users dramatically underestimate the costs associated … Read the rest of this article!