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Category: Investing 101

  • 10 Questions Before Buying a Stock

    Why are you buying this stock? You need to be able to define why you like a company’s stock before buying it. Buying because you heard a great stock tip is a recipe for disaster. The investors who can time their entry into the next “hot stock” are rare to find after the tip has trickled…

  • What Every Investor Should Know

    Anyone investing in the stock market should know a few basic principles to understand what they are buying into (or what their investment advisor is buying for them). These few points are the bare minimum investors should comprehend before placing any of their money at risk. Funds come in two basic types – mutual funds…

  • When Should you Hire an Investment Advisor?

    As strange as it might sound coming from an Investment Advisor, not every investor needs to hire an advisor.  Others might not need an advisor yet, but will need one eventually.  Here are some points to consider if you are trying to decide if or when you need an advisor. 1. Have you saved more…

  • Fund Managers Are Not Looking Out for You

    Mutual fund managers have the job of managing their mutual funds.  They do not have the job of doing what’s best for each individual client.  While they are tasked with managing their funds to get the best gain possible within the scope of their fund’s parameters, they are often tasked with being at least 90-95%…

  • Insurance for Investments

    Most people (at least the responsible ones) can’t imagine driving a car without insurance covering it.  The same goes for home owners and a lot of renters.  Insurance is a mandatory cost for these expensive pieces of property.  Jewelry is insured.  Cell phones can be insured (if the buyer falls for the sales pitch on…

  • What is Compound Interest?

    Compound interest is interest that adds onto the principal and the previous interest earned.  Simple interest only accrues on the principal and not previous interest payments.  Compound interest grows much faster than simple interest because it is earned (or paid) on a rising balance.  The more frequent the interest is compounded, the quicker the balance grows. When…

  • Protecting Your Account with a Trailing Stop Ladder

    Investors have multiple choices on how they can protect their accounts from major losses in a bear market.  One of my favorites and most often used methods is a Trailing Stop Ladder.  A trailing stop allows an investor to place a limit order that moves higher as the stock (or ETF) moves higher.  The order…

  • Limit Order vs Selling a Put Option

    A trader who thinks a stock might dip before moving higher has a variety of choices when deciding what type of order to place.  Each choice has risks.  Two of the easier-to-execute orders are a limit order and selling a put option (also known as “writing a put”).  Both of these choices allow the trader…