Investment Planning Strategies

Investment planning strategies for self-directed investing.

Two Simple Investment Concepts for Retirement Investing – Most Investors Fail at Least One of These

February 22, 2012

Invest Your Money? Sometimes investment concepts appear to be simple; yet most people fail to meet their retirement goals because they miss the basics. These two simple investment concepts are extremely basic; yet if you fail either one you will probably fall short of meeting your retirement needs. Invest Your Money You must invest your [...]

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What is the Difference Between Saving and Investing?

February 21, 2012

The difference between saving and investing is clarified with an explanation of saving and savings, and investing and investments. Once you understand these distinctions; the difference between saving and investing is fairly easy. Saving is the act of preserving income for a future use; or an amount of income that is not currently consumed. After [...]

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Investment planning strategies for self-directed investing.

Stock Market Trading Terms for Dummies

February 19, 2012

Stock Market Terms Investors who understand stock market trading execution terms increase their ability to make efficient transactions.  Being a smart investor means understanding trading terminology and use the tools that best fit your needs for executing transactions and risk management. The following trading terms are common and available on most, if not all, trading [...]

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Making Probability Theory Practical for Investment

February 1, 2012

Making Probability Theory Practical One of my favorite sayings is “Anyone who tells you they know what the stock market will do in the short term is either a fool or a liar”. The market cannot be predicted on a daily, weekly, monthly or yearly basis. This is NOT true for long periods of time; [...]

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Investment planning strategies for self-directed investing.

Emergency Money Fund: Building Savings in a Low Interest Rate Environment

January 29, 2012

Building Savings in a Low Interest Rate Environment Having an adequate emergency money fund is the foundation of a solid financial plan. Just as you would place a solid foundation before building your home you need a solid emergency savings fund for unexpected needs. Emergency Money Emergency money is money kept safe and separated from [...]

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Saving, Investing, and Gambling: The Importance of Differentiation and Compartmentalization

January 18, 2012

Compartmentalize Saving and Investing A common mistake is to not compartmentalize  and differentiate between saving, investing, and gambling. It’s an easy mistake because not enough people think it through, and the terms are used interchangeably in our culture. I believe understanding the differences and treating each one differently and separately will help you think clearly [...]

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Investment planning strategies for self-directed investing.

Modern Investment Portfolio Theory – Why Should You Care?

January 13, 2012

Modern Portfolio Theory Modern Investment Portfolio Theory was developed in the 1950’s with the belief that portfolio returns could be maximized for a given amount of investment risk by combining assets in a particular manner. The theory is that, using relationships between risk and return such as alpha and beta, and defining risk as the [...]

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Standard Deviation and Probability – The Effect on Financial Decision Making

January 11, 2012

Standard Deviation and Probability Standard Deviation and Probability make us better risk managers because they cause us to consider lower probability outcomes in our financial decision making process. What is Standard Deviation? Standard deviation is a standard measure of investment risk. It is a historical statistic measuring volatility and the dispersion of a set of [...]

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Investment planning strategies for self-directed investing.

Portfolio Management: Part I of Series on Investment Risk and Returns

January 9, 2012

Basics of Portfolio Management The basics of portfolio management are investment risk and return. Everything a portfolio manager does; planning, asset allocation, diversification, risk management, investing strategies, etc., boils down to trying to affect investment risk and return. This is why it is critical to understand investment risks and how it relates to investment returns. [...]

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What is an Exchange Traded Fund (ETF)?

January 6, 2012

What is an ETF? What is an ETF? An Exchange Traded Fund (ETF) is an investment vehicle; a hybrid of mutual funds, stocks, and closed-end mutual funds. ETFs hold a basket of assets such as stocks, bonds, or commodities and trade on a market exchange so they can be traded anytime stocks trade. Most ETFs [...]

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