How To Become A Better And More Successful Investor

If you’re looking to take your game to the next level, here’s an excellent habit to develop: Anytime you encounter a data point or statistic that tells you about the supposed quality of a given investment, quickly follow that up by asking the question, “Is there any countervailing force that will offset this?”

I’ll give an example. If you read analyst reports about Altria (which was called Philip Morris up until about five years ago) anytime between 1983 and now, you would have encountered this line dutifully added in the “risk” section of the analyst reports: Gross tobacco volume shipments in the United States are declining by about 3-4% annually.

This is a permanent structural change in the tobacco industry. It is a very real risk of tobacco investing, and the analysts are right to note it in investor presentations. Yet, relying on this fact to make an investment decision … Read the rest of this article!

Cash Flowing Into Investments Right Now

I am a little bit wary of when there is a large rise in capital flying into the markets because it suggests the possibility that assets could be trading at an inflated mark. Often enough, “good days” are not recognized until they are followed by days that are decidedly not good days and then held up as comparison between the two.

In the most recent Allianz Report on Wealth Trends in 2018, it was noted that each dollar generated in the U.S. economy results in 17 cents flowing into stocks and bonds as investments, whereas in 2010, it could only be said that 10 cents were doing the same. During the last time U.S. investment per dollar earned was this high (1999, 1989, 1969, must be a year that ends in “9” thing), it did coincide with moments that seemed to be identified as market highs in hindsight.

The million-dollar … Read the rest of this article!