AuthorZeb Pilcher |
Back to Blog
Week 95/16/2021 Week 9 consisted of chapters 5,6,and 7 of The Art of Invest Lessons from History's Greatest Teachers by; John Longo. Chapter 5 was really hard to follow and I didn't get much out of it besides the saying "risk only what you are willing to lose". This is very important to understand about investing. There are alot of risk involved. A company could go bankrupt, the market could crash, a stock could slip and drop 50% cutting your investment in half. The chances of these things happening are relatively slim but there is definitely a chance you could lose money. Chapter 6 taught me about index funds. Index funds are a form of mutual funds that are based on an index such as the S&P 500. Index funds are passively managed and usually have. decent returns. They have smaller amounts of risk because of diversification. They also have a lot smaller fees compared to mutual funds. The only downside compared to mutual fund is the stocks are not selected and cant change. This is one things that I plan to invest a lot of my money in because historically they have good returns, little fees, and relatively safe. Below is and example of an index fund. Chapter 7 was all about small cap stocks which are stock with smaller amounts of capital usually above 300 million and and no higher than 2 billion. These are the types of stocks mentioned in the other book I read which was The Little Book of Big Profits from Small Stocks By: Hilary Kramer. The main advantage to these stocks are smaller investors are able to buy them before the herd. The herd is referred to as large mutual funds managers, and wall street. These stocks are under the radar so they are harder to fine but can have massive rewards especially if you are able to buy before the herd. Like all stocks the more risk involved the more rewards are available. The stock market is almost like legal gambling with the ability to cheat by doing research.
0 Comments
Read More
Leave a Reply. |