Principles

During times of a down market and people all around you are selling their stocks left and right, I am reminded of a passage that I heard (or read?) from Warren Buffet. It goes like this: You are perfectly free to ignore Mr. Market or take advantage of him, but it will be disastrous if you fall under his influence. Suppose the price you could see your home at was quoted every day. For several; months the quotations steadily decline. Would you then sell your home, the home you were …

Continue Reading about Think of an Investment as A Home You Are Happy to Inhabit

I heard a cool phrase the other day - I do not remember who and I have no idea who coined it but it went something like this: The only time to pray for a rising market is when you are selling a company - when you are a buyer, the more stocks fall the better!! Makes sense to me. Let the market fall and stay down for a while. I can then keep buying cheap stocks that are awesome companies. Then when it is time for me to sell, let the market rise like a banshee. We all know that the market …

Continue Reading about The Only Time to Hope the Market is Rising Is When You Are Selling

I have received a number of questions over the past year or so on the best way to determine what an investment portfolio may be worth in the future. My response always starts with the same thought: it completely depends on your assumptions. The assumptions you make with regards to your annual contributions and your investment returns will greatly alter what the future value calculation will return. If you keep that in mind, then you can safely forecast to your hearts content what you might …

Continue Reading about Calculating Future Value Using Excel

I was sitting on the train coming into work this morning and there were these two mid-forty year guys having a chat about money. Usually I try to tune people out on the train, but this one I couldn't. They were talking about investing. Now, I understand this may not be all that fascinating. However, I assure you that it was. What they were talking about was investing in junior oil and gas plays that they were hoping would make them rich. I got the impression that one guy worked at one of …

Continue Reading about Everyone is Hyped About Investing Again

A recent article in The Globe and Mail (one of Canada's national newspapers) reports that RBC Dominion Securities Inc. (owned by the Royal Bank - I own this) is advising us that we are in for a rocky road ahead and that investors should take action to protect themselves. Ok fine, but just wait until you hear what they recommend: To protect themselves from an “absolute” stock market decline, RBC recommends that investors pare their equity exposure outright, either through the use of …

Continue Reading about Innevitable Doom Coming – Call Our Investment Firm and Save Yourself

I have been doing a bunch of thinking about when a good time to sell an investment is. The reason is because I was speaking with an acquaintance about some stock options that he had with his company that he has only exercised once in his time with the company (7+ years). It was a few years ago and since that time, the stock has appreciated 5 times the price of his exercise. Essentially, he "lost" a lot of money because of selling too early. He therefore decided that he would never …

Continue Reading about It is Never Too Soon to Take Money Off of the Table