If you have gone through the videos here, read the book and really delved into the subject and you understand risk, time horizon - what is sure and what is total gambling, and you have a long-term view and understand how investing works - then prudently beginning is the next step.
Sunday, June 22, 2008
Saturday, June 21, 2008
37. Transaction Costs
One of the things that can damage our returns is transaction costs - a brief video on this subject.
Thursday, June 19, 2008
36. Following the Crowd and the Role of Expectations
Blindly following the crowd can lead to some of the worst investment decisions - something everyone is expecting in the future is also often already reflected today.
Often one can read headlines like 'this market is expected to rise strongly for the coming year' or 'this stock will perform strongly'. If everyone, or a very large percentage of the market participants expect the same thing, then often all of the future expectation is already priced in today.
Smart investors spend a lot of time trying to figure out things that might not be expected or priced in - that is also a reason why financial literacy and therefore not having to believe everything you hear are so important.
35. Diversification - savingandinvesting.com
Diversification - or not putting all your eggs in one basket - has a solid foundation in math. In fact there are some really good reasons to always bear them in mind.
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