We take a deeper look at my investment portfolio in this post. A majority of my investments are in stocks or stock index funds. I have been working on my investments for last 20 plus years. These investments have evolved over time – initially all I had were some stock and bond … [Read more...] about A deeper look into my portfolio
Complete List of Blog Posts
Why I stay invested in stocks?
Last week, I heard two of my friends talk about an impending market crash. One of them told me he has been doing well in the stock market since he invested in the beginning of this year. But he does not think that the market will stay at these lofty levels for too long. The other … [Read more...] about Why I stay invested in stocks?
Beware, the markets go down often!
Because we are long-term investors, we will frequently face market downturns. To better prepare ourselves for these unpleasant but inevitable declines, it is good to study the history of the stock market declines. Looking at the US stock market, on average this is what we … [Read more...] about Beware, the markets go down often!
My 401(K) story – from 1992 to 2012
I worked for one Fortune 100 company for a bit more than 20 years. I had an active 401(K) retirement account while I was working for it. I saved and invested a portion of my earnings every year—taking advantage of company matching dollars and tax-deferred savings. What follows is … [Read more...] about My 401(K) story – from 1992 to 2012
Investing in installments
One recurring theme in a young earner’s life is that you never have enough money to buy something outright! But what you do have is future cash flow – many years of earnings ahead. You take out loans against the future earnings to buy a car or a house that you otherwise could not … [Read more...] about Investing in installments
Seeking instant wealth? Don’t!
Why so many people seek to double or triple their money in no time? First, it’s the thrill of doing it. And perhaps bragging about it to friends and family. Another reason could be that people don’t really understand the power of compounding. As we explored in an earlier post, … [Read more...] about Seeking instant wealth? Don’t!
Don’t be dismissive of low returns
When we invest, we dream of making it big and making it quick. We all have read overnight millionaire stories in the media. Doubling our money every year or even every two years is our ultimate goal. Getting a return of 10-20% each year sounds very pedestrian and unsatisfactory. … [Read more...] about Don’t be dismissive of low returns
Reinvesting is key
The magic of compounding only bears fruit if you reinvest all the earnings back into it. Let your money run as long as you can. If you take it out too soon – either to spend it or move it to cash – you won’t get the full benefit of compounding. This is best seen by an example … [Read more...] about Reinvesting is key
How does money compound over time?
Compounding is very powerful phenomenon if done over a long period of time. But it is also widely misunderstood. Compounding in our money savings context is simply how we allow any interim returns on our money be reinvested with the original principal. Consider a bank that … [Read more...] about How does money compound over time?
When stocks turn into perpetual bonds
When you buy corporate bonds, you are told how much interest you will get and for how long. Your expected returns are spelled out by the company issuing the bonds. If you hold these bonds until they mature, you will get your initial investment back. There are risks, of course. … [Read more...] about When stocks turn into perpetual bonds