Tag Archives: compounding

The next time the stock market has a large decline, examine your emotions. Are you exuberant or despondent? The answer will tell you if you are an investor or merely a speculator.

One would think that following two major market corrections of over 50% within the last two decades, investors would have a better appreciation for how much time it takes to compound your way out of losses. While buy-and-hold investors who stayed true to their strategy over the last two decades are indeed ahead, they lost many years of valuable compounding time in a quest to “get back to even.” The bottom line is that corrections and crashes matter a lot.

Retirement can last 30 years or more so here's what you need to do now (or by age 30 at the latest) to maintain your lifestyle once you stop working.

Compounding can be tricky to calculate in your head, however, unless you’re a math whiz. The good news is you can use a mathematical shortcut called the “rule of 72” to quickly estimate how long it takes an investment with a fixed annual return to double in size.

What's the key to making good investment choices? It isn't necessary to understand the inner workings of the securities markets or the mathematical economies underlying investment theory. Instead, 10 axioms of effective investing provide the critical cornerstone for guiding investment philosophy and making decisions. [Here they are.] Words: 2155

The most dangerous, wealth-destroying investment in the world is leveraged exchange-traded funds (ETFs). On the surface, these ETFs promise to double or triple the movements of the underlying markets they track...but they'll do anything but. You see, double- and triple-leveraged ETFs (whether long or short) pack a nasty surprise. It's almost unbelievable, actually, and particularly in this volatile market, theses ETFs are hardwired for losses. Here's what I mean.