Read Online Investing in Stocks: Between Growth and Value : Long Term Wealth Creation With Low Risk and Low Cost MOBI
In 2019 the S&P 500 increased by 31% (dividends included). This is not an exception but nothing else than the continuation of an unbelievably strong bull market which started with the financial crisis of 2008-2009. Although not every year will show such outstanding results, the present bull run shows little sign of exhaustion even in the current pandemic. Can you really afford to stay on the side-line by not investing in stocks when even billionaires are fully invested? This book does not give a selection of stocks which the author would advise you to buy. Such stock tips if given in books risk to be outdated already when the book is available on the market and it may well be that you buy at a moment when you should have sold the recommended stock. Furthermore whereas such tips might be useful for most people they might be totally unsuitable for your personal situation. In line with the old Chinese proverb “Give a man a fish, he'll eat for a day, teach a man to fish and he'll eat for a lifetime”, the objective is to give you an investment methodology, as well as the basic concepts of the Wall Street jargon, allowing you, not only to really understand stock markets but to profit from the ongoing secular bull market. With ridiculously low interest rates which are nowadays prevailing on a worldwide basis, investing in stocks is currently the “only game in town” unless if you opt for a total blind flight like buying crypto-currencies. Summary of content:Investing in stocks, as opposed to speculating in a collection of asset classes, is the art of reconciling the search for yield (in the form of dividends and capital gains) with the risks of losing a large part (or even the entirety) of the risk capital any stockholder puts at the disposal of the company they invest in. Selection of stocks with the potential of becoming 10-baggers (and more) consists in searching for companies with large moats giving them competitive advantages allowing them not only to survive but to grow and prosper over the long term. Although the Efficient Market Theory claims that searching for stocks with such competitive advantages is a loser’s game (because allegedly markets do always fully discount any information available) successful practicians strongly disagree and legendary investors claim that markets may be inefficient even over longer periods in this way allowing for prices prevailing which offer a high margin of safety. If diversification is sometimes claimed to be the free lunch of efficient markets and of CAPM, practicians again disagree and they go for a concentrated portfolio.Shorting of stocks and its shortcomings are explained in detail. Buying stocks at low prices conveys a margin of safety which ensures not only higher future returns but at the same time lower risks. The successful investor, with a long term perspective will incur lower trading costs, lower taxes (by deferring the tax liability for decades) and if managing their portfolio themselves, with no management fees will, increase their chances to generate alpha when compared to the benchmark indices, say the S&P 500.
