Shares and bonds and a chimpanzee to choose from

Equities and bonds have historically been an excellent vehicle for long-term investment. In essence, it means ownership of the business that drives the world forward. As the world grows, so do the companies and actions that underlie them. Financial markets are no longer dictated by a few strong stock exchanges, such as the New York Stock Exchange and Deutsche Boerse (German), but are affected by a vast and complex, interconnected network of financial sticks. There are, of course, many ways to invest in these global slices of corporate ownership, but for now we will save the sexy, albeit risky, stock trading methods that involve derivatives, exchange rates and daily trading for other columns.

Lusha, the Investment Guru

Investing in stocks and bonds is very simple in principle: buy low and sell expensive. Quite easily, in fact, fortunes were made by men with doctorates and MBAs along with names and celebrities from the television financial network, who wrote volumes about trends and charts and flash indicators, stochastics and investment psychology and even rallies based on the fact that the Dallas Cowboys win or lose. They are all experts and they all have different opinions, literally thousands of opinions. There is also a famous chimpanzee in Russia named Lusha, who throws his defecation on a list of stocks on a chart, and those stocks have tended to match or beat the choices of some of the world’s most sophisticated analysts. . What does that tell us? Low buying and high selling are not yet so easy or better, we can choose to pay analysts high commissions or hire a primate at a much lower cost to be our stock provider.

Indicators and common sense

A good place to start when buying stocks, bonds and mutual funds is to learn a little about indicators. These are tools that provide an analytical look at a company and its relative share price. One of the most common is the P / E ratio (Price Earnings Ratio), which analyzes the current share price in relation to earnings per share. Makes sense! The P / E ratio is simply the share price divided by earnings per share (which can be found in any number of financial publications). A high P / E ratio could indicate that a stock is overvalued, and a low P / E ratio could imply a stock is undervalued, but this is only an indicator and is completely flexible. For example, during the dot-com bubble, some companies had no earnings as in a zero P / E ratio … bait … a large fat donut … and yet these stocks sold through the roof at hyperinflation prices . Which brings us to the most important indicator you can use. It is found in the six-inch analyst hiding between the two ears.

Warren Buffet said, “Invest in what you know.” For example, you may agree that there is an aging baby boom population after World War II. What this means? It could mean that companies that sell services or products to the elderly will do well in the coming years. You may want to invest in a start-up called FN Walkers Inc. (fictional), which developed a compact titanium walking device with a built-in espresso machine. The company reports orders back through the roof. Or you could consider government obligations. These are usually the safest investments on the planet and tend to do well in times of revolt. Why? Because investors run to safety faster than golfers. When rockets start firing into the world, investment dollars flow like rivers into safe havens and, as a result, the price goes up. With connections, forget about stochastic oscillators and moving averages for 10 years and pray for instability and bad news!

After all, you don’t need an expensive investment guide or defecating a chimpanzee.

Diversify by putting eggs in a large basket

There is another way to buy stocks and bonds. It is through mutual funds. A mutual fund is simply a managed collection of stocks or bonds or goods that are held in a large basket and managed by really smart guys. Mutual funds come in many packages, such as funds based on Dow industrial stocks or growing companies or corporate and government bonds, or pharmaceuticals, or in emerging markets in China or Brazil. The theory is that owning a small piece of a hundred stocks is safer than owning a single stock. Another advantage of holding mutual funds is that they are completely liquid, which means you can leave your position almost immediately. The performance of the mutual fund is largely based on the expertise of the fund manager and the results can be closely monitored in many cases with a moving average of 1 year, 5 years, 10 years or even 20 years.

This Autors Pet Peeve who needs advice to manage anger

Always, Always, Always, be aware of the advice of your brokers or the advice of so-called experts. On October 9, 2007, the Dow industrial average reached an all-time high of $ 14,164. After that, it started to fall free like a parachute-free base jumper and eventually hit hard at a low of $ 7062 on February 27, 2009. Investment gurus told us to keep … that the market will return. Poppycock, Fubar !!! Better sell the stock as high as possible to get out and then jump back when it’s convulsive in a pile sprinkled on the floor. If you left some time after the market started selling and then re-entered after the dust went out, you would be in a substantially better position than letting the investment go, in fact, even if the market is now dancing around. of 12,000 would still be 15% AFTER the market maximum that reached 14164 USD. Isn’t that what brokers should do?

Anyway, I’m getting sick on fast Russian rolls.

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