Long-term investing is an investment strategy where a position is taken in a stock, a market, a currency, or a commodity and is not sold for at least a few years. Proponents of long-term investing believe this buy-and-hold pattern will pay off in the long run.
The danger with long-term investing is staying with a position that continues to lose money. The most important aspect of long-term investing is to evaluate the investment thesis constantly. Things change. If the change alters the investment thesis, then an investor needs to sell and move on. If the thesis still works, then the difficult part is staying with a losing position until the market turns and proves the thesis right.
Oil prices are in a dark area now, as the commodity is considered the dirtiest of all commodities at this time. With no strong base in sight for oil prices, we could see additional downside moves; albeit, $50.00 looks like a pretty good area for support. On the chart of the West Texas Intermediate (WTI) crude, oil prices fell to the $53.00 level earlier this week but managed to stage a small rally back to $55.00–$56.00.
Strangely, Americans are getting richer and poorer at the same time, and this is benefiting the luxury brand stocks. While the number of Americans requiring food stamps is at a staggering 48 million or so, at the other end of the spectrum, the rich are increasing their wealth to new record-highs at a rapid pace. This is what will help the luxury brand stocks—a widening income gap that’s seeing the rich rapidly becoming richer. In 2013, there were about 9.63 million households with a net worth of at least $1.0 million, according to Spectrum Group. Given that the S&P 500 has gone up about 200% during this current bull market, it’s not surprising to see the rise of the wealthy. Add in the in ... Read More
While China is struggling with its gross domestic product (GDP) growth metrics, the country’s main stock market—the Shanghai Composite Index (SCI)—is easily outperforming the S&P 500 and NASDAQ. China may be stalling, but the Chinese economy is still growing at a rate of more than seven percent—far better than the rest of the G8 countries. Now, of course, that’s if you believe the GDP reading that is put forth by the Chinese government; as with most data coming from China, it is up for debate whether it is real or fictitious. But going forward on the premise that the GDP reading is accurate, you can understand that the potential for investment growth is significant. The SCI is up 37% this year, easily outperformi ... Read More
As we enter the final month of 2014, it’s coming close to the time that you, as an investor, need to start to round out the year and take account of what to look for in the remaining weeks and how you can potentially turn a profit. The stock market bulls continue to be in full control as we move into the final month of the year. Only the small-cap stocks are threatening to finish the year in the red should a “Santa Claus” rally fail to emerge over the next few weeks. With QE3 gone and higher interest rates looming on the horizon in 2015, the stock market is looking for direction from retail sales during the next few weeks and the jobs reading this coming Fri ... Read More
For those who love shopping via the Internet on their computers, tablets, or mobile phones, today is the day many are waiting for—Cyber Monday. It’s a day of great bargains while you’re on the go. But even investors may find a good play for Cyber Monday in the online retail sector. While Black Friday tends to be huge for the physical brick-and-mortar sales, retailers understand online sales are rapidly becoming a bigger component of total sales. The increased importance of this is obvious as sales online are at more than $2.0 billion and are rising each year. Plus, with the growing advancement in mobile technology and the desire of retailers to develop a strong online presen ... Read More
With a long-term portfolio, the goal is to earn a constant rate of return over a long period. Sadly, even with this in mind, investors end up making decisions that jeopardize their long-term objectives. They make mistakes, but luckily, the effects of these mistakes can be easily controlled, saving their portfolio from disaster—it all comes down to these three principles of smart long-term investing that every investor needs to know when building their long-term portfolio. When There’s Rising Optimism, Go into Protective Mode Too ... Read More
One of the most hotly debated topics these days is the role of activist investors. Some people have the impression that an activist investor is not a positive factor when it comes to long-term investing. I disagree, as many times, the investment strategy recommended by these activist investors ends up benefiting all shareholders. Probably the most well-known, and certainly the wealthiest, activist investor is Carl Icahn. One of the things I like most about Icahn’s investment strategy is that he is willing to buy when others are selling and be vocal about his intentions. A pe ... Read More