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.
Tim Cook must be pleased with the results of Apple Inc. (NASDAQ/AAPL). Heck, the company sold an amazing 74.5 million “iPhones” and has become the top seller of smartphones in China, surpassing rival Samsung Electronics Co. Ltd. and China-based upstart Xiaomi Inc. (aka “the Apple of China”). Based on the numbers, China has become a massive growth region for Apple. But is the iPhone’s success enough to keep the stock on top?
Apple Stock Undervalued? Icahn Says So; I Say MaybeI recently discussed Apple a few weeks ago when the stock was trading at $108.00. It’s now up $10.00 in little more than a week.
The 460-point intraday swing in the DOW on Tuesday could be reflective of what to expect this year. While I was sitting at my trading desk, I was thinking how the volatile swings in the stock market would likely scare the average investor. Recently, my dad called and asked me what I thought about the state of the stock market. My immediate answer was that it really shouldn’t matter that much to him at this juncture in his life. Now, I’m not saying my dad shouldn’t worry, but he should be largely invested in lower-risk income-producing investment vehicles, such as the banks and utilities, along with higher-yielding bonds anyway. And that leads me to an im ... Read More
The start to the New Year is probably not great if you are sensitive to stock market volatility. The past week was relatively what you can expect for this year—a weak and volatile stock market. (Fortunately, there are three investment strategies investors can consider to profit this year; you’ll find them below.) The DOW had three triple-digit losses, cumulating in a decline of 661 points that was partially offset by two triple-digit gains of 525 points last Wednesday and Thursday. When the markets opened this week on Monday morning, the DOW was down 150 points. If you don’t like stock market volatility, then the current trading action is not f ... Read More
We received great news last week after the reporting of strong jobs numbers in December that capped off a good year in which the country created more than 2.5 million jobs. In December, 252,000 new jobs were created, driving the unemployment rate down to a pre-recession low of 5.6%. The numbers for new jobs created in October and November were also revised higher. With gross domestic product (GDP) growth at an annualized five percent in the third quarter, there is optimism jobs will continue to be added at the current rate for this year. And as the jobs market improves, the positive action will translate into added confidence for workers and spending. In ... Read More
It’s that time again; another quarter has come to an end. The fourth-quarter earnings season numbers will officially start flooding in for the S&P 500 on Monday, with Alcoa Inc. (NYSE/AA) the first to report. However, the stock market is currently in a funk, beginning 2015 with weakening oil prices and continued concerns over the global economy. The problem: as the stock market searches for a reason to buy, several segments are suffering from the selling pressure. There is, however, one segment expected to look up heading into 1Q15 and that’s the healthcare sector. But more ... 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