Investment Real Return

Usually when someone is talking about how well an investment has performed – they are usually talking about the actual percentage increase of the value of that investment over a certain period of time. For example if an investor bought a mutual fund at the beginning of the year for $100 per unit and sold […]

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Risks of Fixed Income Investments (Bonds)

If you are not familiar with fixed income investments then click here for an introduction to fixed income investments. Fixed income investments are defined as securities that have a regular fixed return or payment associated with them such as bonds. Here are some risks to consider when investing in fixed income investments. Inflation Because […]

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“Blue Chip” Stocks

Companies that are large with solid earnings increasing over time and long histories are considered to be “blue chip” in nature. The theory behind investing in such companies is that you will hopefully get regular stock price increases and/or dividend increases but there won’t be much risk. The term comes from casinos where the blue […]

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Different Types of Stock Market Indexes

This topic is little more advanced than usual for this blog so try to learn the main points and dont worry about all the details. If you are not familiar with stock indexes then please read this post on stock market indexes first. Market Value-Weighted Index The most common type of index is called market […]

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Some Index Funds and ETFs Are Not Diversified

One of the benefits of index funds and exchange traded funds is that they allow you to easily purchase a low cost diversified investment product. Diversification is a key concept in investing so this is an important factor. For example if you want to buy a fund that contains only American companies then a S&P500 […]

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Should I Invest In Dividend Stocks (and what are they?)

Dividend stocks are any stocks that pay some form of dividend. However, most investors refer to companies that have a long history of paying out dividends and increasing those dividends over time as “dividend stocks” – Dividend aristocrats is another term used for these companies. Some examples of dividend stocks are Johnson and Johnson, Proctor […]

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Carnival of Debt Reduction – Learn Some Investing Basics

Debt reduction is a key part of financial planning because you don’t want to be making those loan payments for the rest of your life. However, what happens when you have your debts under controls or even…(gasp) completely eliminated? Then you have to start investing for your retirement. Foreign exchange trading is a risky trading […]

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Safe withdrawal rate for retirement funds – 4% rule

One of the biggest concerns for retirees is the fear of running out of money. How do you know how much of your investments you can withdraw every year without running out of money? How much money can I safely withdraw from my retirement funds? Simple – use the 4% rule. This will give you […]

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Stock Prices Do Not Represent Stock Value (or Company Value)

Stocks trade for a wide variety of prices. Penny stocks trade for prices less than a dollar, which is what their name suggests. Some stocks buy and sell for very high prices such as shares of Berkshire Hathaway (BRK-A) which recently sold for $131,500! Most stocks trade between a couple of dollars and a few […]

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Investment Time Horizons for Retirees

Check out my introductory post on investment time horizons. Investment goals such as retirements are long (hopefully) term events. If you are 55 years old and are planning to retire in 5 years then you should have a portion of your investment portfolio set aside which will have a short term horizon and therefore will […]

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Warning – Not All Index Funds and ETFs Are Low Cost

One of the big sales points for index funds and etfs (exchange traded funds) is that they have low expense ratios (ie they cost less) compared to actively managed funds and therefore will perform better (at least that’s the theory). This is a very important concept for passive or index investing but it’s important to […]

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Commodities

One of the investment asset classes that gets a fair bit of press coverage is commodities. What are commodities you ask? Basically they are raw materials that are mined, grown and used in construction and manufacturing items like cars. The definition is any material or produce that is consistent in quality and type. It doesn’t […]

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Transfer In Kind

If you have your investments with a financial institution and you want to transfer it to another financial institution then you need to ask the new institution to transfer your investments from the old company to the new company. An example of this is moving from one online brokerage to another online brokerage that has […]

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Transfer In Cash

If you have your investments with a financial institution and you want to transfer it to another financial institution then you need to ask the new institution to transfer your investments from the old company to the new company. An example of this is moving from one online brokerage to another online brokerage that has […]

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Investment Policy Statement

One of the key points to being a successful investor is to create an investment strategy (no matter how simple it might be) and stick to it. Your strategy could involve something complicated like trading options or something simple like putting $100 into an index fund every month. It can be difficult to stick to […]

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Spring Has Sprung – Carnival of Personal Finance #199

I thought it would be nice to have a pleasant, non-investing-related theme today since normally this blog is all about investing – more specifically it’s a learn to invest blog for learning the basics of investing. If this is your first time here then feel free to poke around – all the articles are nice […]

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