how to invest

Unbeatable Investment Advice from the Great Richard Russell

By Steve Christ, Executive Editor, Money Morning - April 18, 2013

Of all the great financial gurus, Richard Russell is my all-time favorite.

A bona fide old timer, Russell has survived the Great Depression, the Battle of Normandy, a heart attack, a stroke, and a motorcycle accident.

If that's not enough, he still rises long before dawn as the author The Dow Theory Letter. Even at age 89, he has never missed a single issue.

Needless to say, bull market or bear, Russell has learned a few things along the way.

In fact, here are a few nuggets of this well-earned wisdom written long ago in a letter entitled "Rich Man, Poor Man."

What Russell has to say here is absolutely priceless....

Richard Russell on Compounding:

"When I taught my kids about money, the first thing I taught them was the use of the "money bible.' What's the money bible? Simple, it's a volume of the compounding interest tables.

"Compounding is the royal road to riches. Compounding is the safe road, the sure road, and fortunately anybody can do it. To compound successfully you need the following: perseverance in order to keep you firmly on the savings path. You need intelligence in order to understand what you are doing and why. You need knowledge of the mathematical tables in order to comprehend the amazing rewards that will come to you if you faithfully follow the compounding road. And, of course, you need time, time to allow the power of compounding to work for you. Remember, compounding only works through time."

Read more...

Read More…

How to Invest Like Warren Buffett

By , Money Morning - March 15, 2013

If you want to know how to invest like the best, a good place to start is with Warren Buffett.

Legendary Buffett, CEO and Chairman of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), first started his Buffett Associates, Ltd. in 1956 with $105,000 - mostly contributed from family and friends.

He now ranks fourth on Forbes' Richest Billionaires list, with a new worth of $53.5 billion.

Part of the reason for his success: He was never swept up in the euphoria of Wall Street crowds.

Behind the small-town-boy-turned-mogul story is a keen mathematical mind that has been honed into a highly successful stock-picking machine. Buffett began under the mentorship of the late Benjamin Graham, the father of value investing. Buffett perfected his skill through countless hours of studying annual reports of virtually every American publicly traded company over the last five decades.

Now the Oracle of Omaha's Berkshire Hathaway empire consists of some of the most recognized U.S. brands.

Buffett's "Big Four" investments - American Express Co. (NYSE: AXP), The Coca-Cola Co. (NYSE: KO), International Business Machines Corp. (NYSE: IBM) and Wells Fargo & Co. (NYSE: WFC) - represent the kind of businesses Buffett trusts his money to.

"The four companies possess marvelous businesses and are run by managers who are both talented and shareholder-oriented," Buffett wrote in his 2012 Berkshire Hathaway shareholder letter. "We much prefer owning a non-controlling but substantial portion of a wonderful business to owning 100% of a so-so business."

By taking a closer look at Buffett's career, and his favorite investments, we pinpointed three key factors to Buffett's investment formula that separate him from the common investor.

These factors, employed at key moments in Buffett's decision-making process, reveal a sophisticated formula for stock selection, as well as exploiting opportunities when other investors overreact.

To continue reading, please click here...

Investing in 2013: Best Bets in an Uncertain Economy

By Larry D. Spears, Contributing Writer, Money Morning - December 31, 2012

If you're planning on investing in 2013, economic uncertainty probably will be a factor in deciding where to put your money - but some sectors stand out as solid prospects regardless of the economic climate.

Here's a breakdown of the best sectors for your money in the New Year.

Hot Sectors for Investing in 2013

Silver: With economic uncertainty expected for the near term, gold is typically considered the best hedging choice.

But, as Money Morning Global Resources Specialist Peter Krauth pointed out in his 2013 silver price forecast, silver actually provides more potential for appreciation - and at a far better starting price.

Krauth says the white metal, currently selling for around $30 an ounce, could move to a new high of $54 an ounce in 2013 - and not just because of its hedging value.

Investment demand for silver should continue to increase, driven by the creation and expansion of several silver-backed exchange-traded funds (ETFs) and increased minting of silver coins.
Industrial use of silver is expected to grow even faster. That's largely due to the use of silver in solar panel manufacturing, which consumed 60 million ounces in 2012.

Solar panel usage is expected to grow as a result of U.S. President Barack Obama's emphasis on alternative energy and increased demand from Japan, which has made a major shift away from nuclear power in the wake of the Fukushima nuclear power plant disaster.

To continue reading, please click here...

Don't Let Wall Street Play You For a "Fool"

By William Patalon III, Executive Editor, Money Morning - July 9, 2012

If you're like me when you go out shopping, you look for deals. You watch for sales. And you search out bargains. Why pay full price when you can get the same item at a hefty markdown?

That's an economic concept known as "price elasticity." This "rule" essentially says (and I'm dramatically oversimplifying this) that when the price of a product rises, demand for it falls.

But here's the part of this "law" that I really find fascinating: When it comes to the "real-world" products and services that you and I purchase, there are no exceptions.

Except for the stock market.

Time and again during my 30-year career as a financial journalist, I've watched this play out.

When stocks are cheap, nobody wants them (by "nobody," I'm referring to individual investors). But once stocks move, and the higher they go, the more individual investors want to buy them.

Need an example? Think back to the dot-com madness of 1999 and 2000; the higher they soared, the more investors had to have them.

Economists refer to this exception to the law of price elasticity of demand as the "bandwagon effect." But there's a better term: The "Greater Fool Theory," which demonstrates how Wall Street uses the retail investor.

That's right ... uses. Those experts have labeled this as the Greater Fool Theory because there's always some other ("greater") fool to unload the stock on - at least until the retail investor decides not to play.

You see, the retail investor is the designated loser - the ultimate "Greater Fool."

Think of it as a game of musical chairs - but one in which the outcome is predetermined: Wall Street investment banks set this game up so the retail investor gets left holding the bag.

To continue reading, please click here...

If You Want to Be a Winner, Follow These Four Rules

By , Money Morning - May 21, 2012

Last month, our in-house metals-and-commodities expert Peter Krauth hosted one of his regular conference calls for his Real Asset Returns advisory service subscribers.

Peter's guest was Rick Rule, founder of Sprott Asset Management's Global Companies unit - a real heavy-hitter and one of the sharpest resource investors you'll find.

Rick is always engaging and provocative, and his presentation to Real Asset subscribers was no exception.

He capped off predictions for gold, energy and other commodities with four rules successful resource investors must follow.

And they're so good I had to share them with you.

Rule No. 1: Use Common Sense: "If it something sounds too good to be true, it is too good to be true," Rick told the conference call audience.

The Takeaway: Like all of Rick Rule's Rules, this one applies to all investments, not just commodities. For maximum gains and minimum heartache, be realistic about your expectations, thoroughly understand what you're getting into, manage your risk and don't succumb to hype.

To continue reading, please click here...

Monday's Stock Market News: UPS Inc. (NYSE: UPS), US Steel Corp (NYSE: X), Glencore

By Kerri Shannon, Associate Editor, Money Morning - March 19, 2012

Monday's stock market news from United Parcel Service Inc. (NYSE: UPS), U.S. Steel Corp. (NYSE: X), and Glencore International Plchelped drive gains in U.S. markets. The Dow moved up a slim 0.05% to close at 13,239.13; the S&P 500 climbed 0.4% to close at 1,409.75; and the Nasdaq rose 0.75% to 3,078.32.

United Parcel Service Inc. (NYSE: UPS) biggest deal in company history: UPS announced Monday a $6.77 billion deal to buy Netherlands-based delivery service TNT Express NV to bolster global sales growth.

TNT is Europe's second-biggest express mail company. Its acquisition will double the UPS presence in Europe and give it about the same market share as the region's industry leader DHL. The deal also will boost UPS's international sales to 36% of its total from 26% currently - a significant leap towards the company's goal of 50%.

Click here to continue reading...

How to Invest: Finding Profits in Any Market

By Keith Fitz-Gerald, Chief Investment Strategist, Money Map Report - October 21, 2011

The traditional ways of saving money aren't enough anymore.

Over the past few years, it's more than likely that your portfolio took a huge hit... your house lost value... and all the dollars you have tucked away for a rainy day lost value with each passing day.

Whether you realize it or not, you're getting burned.

It's time to look at investing in a completely new way.

The old asset allocation models your stockbroker once promised would never lose money (How did that work out for you, by the way?) are the way of the past. The "growth stocks" aren't growing. The "value stocks" have lost their value.

You need a new plan. And we have it for you.

Here at Money Map Press, we use a 50-40-10 model that guarantees real growth from a solid base of investments and reduces your exposure to risk. To learn more about this strategy - and what the Money Map Report is recommending right now, click here.

Let's get started.

Read More…

Investing in Farmland: How to Turn Healthy Profits From the Heartland

By Larry D. Spears, Contributing Writer, Money Morning - September 6, 2011

If Mark Twain was talking about investing in farmland when he suggested "buy land - they're not making anymore," then he knew more about finance than he's credited with.

The Federal Reserve Bank of Chicago just reported that prime farmland prices in the heart of the U.S. grain belt (Indiana, Illinois, Iowa, Michigan and Wisconsin) - were up 17% in the second quarter compared to 2010, the biggest year-over-year increase since 1977.

That's on top of a 12% jump for all of 2010, the second-largest yearly increase in the past 30 years.

In fact, farmland value since 2000 has appreciated by more than 1,200%, according to the National Council of Real Estate Investment Fiduciaries (NCREIF), and netted nice profits for farmland investors.

Just look at the NCREIF's Farmland Returns Index, which measures the quarterly performance of a large pool of individual agricultural properties acquired in the private market for investment purposes.

The index has posted some incredible quarterly gains over the past decade - most notably 22.78% and 14.63% in the fourth quarters of 2005 and 2004, respectively.

Farmland gains for the first two quarters of 2011 were recently reported at 2.40% and 1.48%.

What's more, negative quarterly returns for farmland are extremely rare. Only once since 1992 has the NCREIF Index fallen period-over-period, and that came in the fourth quarter of 2001 amid post-9/11 economic turmoil.

Given the large value gains since 2000, a lot of potential has been realized, but there's plenty of room for future profit.

"It's not the first inning of the game," Shonda Warner, managing partner at Chess Ag Full Harvest Partners, told CNBC, "but it's not the eighth inning either."

To continue reading, please click here...

First Prev