What does a typical stock portfolio look like? Well, it’s apparently not too flash. According to Openfolio — a network of 70,000 members who share their portfolio data — the average US investor made less than half the S&P 500’s return in 2016.
We’ve been preparing for life in a bear market for some time. By this I mean giving ourselves every chance of making some money while also recognising the downside risks of a market potentially transitioning from bull to bear. How is this transition looking now?
Small-caps are an amazing opportunity. They have far more volatility, but that’s the point. Not all small-caps are worthy investments. Some could be amazing. Others you’d be completely crazy to buy. Today we’re going to look at how to approach small-cap investing. Specifically, we’re going to look at how to limit our losses.
Let’s look at the large blue chips. These are usually companies with a market cap of $10 billion and over. Some typical blue chips are BHP Billiton Limited [ASX:BHP] and Commonwealth Bank of Australia [ASX:CBA]. BHP has a market cap of $156 billion and CBA has a market cap of $139 billion.
Why is time so important? I’m sure you’ve heard about compounding, the eighth wonder of the world. It’s compounding that has made long-term investors like Buffett billionaires over time. The longer time drags on, the bigger the gains become.
Today there’s too much information available. There are too many channels screaming for your attention. So whom do you trust? Who do you believe? Who is credible? Who is accountable? What we can also tell you is that transparency is a tell-tale sign of those you can trust.
You probably know the old saying, ‘There’s more than one way to skin a cat.’ It simply means there is more than one way to do something. Nowhere is that truer than in the world of investing. Don’t think there’s only one way to create wealth. There are many.
Some cryptocurrencies are actually starting to create blockchains Wall Street can get behind. Predicably, it’s the big names that are moving first…
You can still profit in a market trending sideways. All you have to do is come up with an investment idea, identify growing trends and only invest in what you understand.
Shorting stocks is, in part, a process of reading market dynamics. What the buyers and sellers are doing. Especially those with informational advantages. The best investors learn to think independently, but invest with market dynamics in mind.