Investments Knowledge or Resources

The process of investing can be defined as distributing money in ways that lead to a return, usually in monetary value. For the beginner, learn how to save money and make smart investment decisions. For the investor, expand your knowledge on investments and increase your ROI.

Comparing Loans in the Peer to Peer Real Estate Market

Have you ever been sold on something too good to be true?  Just recently I made an appointment to get our van’s windshield replaced. I was told over the phone to bring a check for $300 and drop off the car in the dealership parking lot. After waiting about 45 minutes with three kids in tow, I found out it would cost closer to $1000, and I needed to come back later when they had the correct glass. If I had done a little more research and gotten [...]

Comparing Loans in the Peer to Peer Real Estate Market2020-04-12T08:47:49-05:00

Smart Diversification: 3 Steps to Take With Your Peer to Peer Portfolio

In my last post on Peer to Peer (P2P) Lending, I spoke about how we need to diversify, but we run into a problem if we try to just invest in everything. We have way too many P2P marketplaces, 106 to be exact, and so it is impractical to buy the whole sector. Even if we had the money to diversify across all the loans available in all the platforms, it would not be a wise choice as some loans are just too risky. Instead, we are constantly [...]

Smart Diversification: 3 Steps to Take With Your Peer to Peer Portfolio2019-09-12T05:28:39-05:00

P2P Lending Platforms: My Experience With Peer to Peer Lending

As our domestic stock market has become expensive, we continue to look for something better. One area HIT revisited in 2018 was the category of fixed income. The high-level overview of an asset class worth more than $247 trillion has since led me to focus on the specific sub-category of peer to peer lending. To my surprise, my sister showed a keen interest in the topic and as I started to dig, I found her in the trenches alongside me. We have since teamed up and researched over [...]

P2P Lending Platforms: My Experience With Peer to Peer Lending2019-09-12T05:15:25-05:00

The Mailbag: CAPE Ratio, Hard Money, and Bridge Loans

One of the many benefits of writing a blog is the challenge of organizing your thoughts and having them questioned. It’s initially scary to put it out there, but as time passes there is a subtle switch from scary to educational. Our interactions have developed into a mutually beneficial relationship of learning. We rarely all agree on financial topics like the efficient market, behavioral finance, and saving till you are blue in the face.  However, your rebuttals, comments, and suggestions expand and test my own understanding, which in [...]

The Mailbag: CAPE Ratio, Hard Money, and Bridge Loans2019-03-01T15:53:40-06:00

16 Fixed Income Classes Ranked Based On Returns

I loaded up our HIT Investments fire box and got the research train rolling. Aggregating data from 14 fixed income classes, ranging from international high yield bonds to domestic short-term treasuries, was like shoveling coal: difficult, but necessary.

16 Fixed Income Classes Ranked Based On Returns2019-03-01T16:01:37-06:00

Peer to Peer Lending – The Investor’s View

Financial innovation has opened a new and more efficient avenue to connect investors with borrowers. One of the technologies evolving since the mid 2000's has been the Peer to Peer (P2P) marketplace. Since their inception a decade ago they have grown from $0 to $54 Billion.

Peer to Peer Lending – The Investor’s View2021-01-30T06:12:41-06:00

The Story of the T-Bill: Safe Investments Often Lead to Real Losses

When studying finance in preparation for the Series 65 exam there was an emphasis on specific investment objectives. The "safest" investment objective was "Preservation of Capital" and its primary goal was to prevent loss.  Preservation of capital investments includes Treasury Bills (T-Bill), certificates of deposit (CD), savings accounts, and money market accounts (MMA). These holdings are classified as the “safest” investments and are often insured against absolute loss.  In industry lingo, they generate a “risk-free” rate of return.  But before we take it as so, and solidify the [...]

The Story of the T-Bill: Safe Investments Often Lead to Real Losses2019-03-01T16:10:00-06:00

33 Countries Ranked by Value

Benjamin Graham, the forefather of fundamental value investing once taught Warren Buffett, “Price is what you pay. Value is what you get”. Since Benjamin Graham wrote Security Analysis in the 1930’s, more academics, quantitative analysts, and Warren Buffett, have made strong cases that value investing outperforms the general market over the long term. In one example, Buffett’s firm Berkshire Hathaway employs value investing, and their track record outperformed the S&P 500 by 1,586,929% over the last 51 years. (1964-2015 Berkshire Hathaway gained 1,598,284% while the S&P 500 gained [...]

33 Countries Ranked by Value2019-03-25T16:05:50-05:00

Value vs. Price: The Difference is Very Real

Our natural human condition is to know and communicate the price of a product while ignoring the product’s value. Oscar Wilde once said “Nowadays people know the price of everything and value of nothing.” This is a fundamental flaw in how we think and it has played a part in strengthening the consumerism culture we live in today. An everyday example of a marketer taking advantage of this flaw is the marking up of an item by 50% to only then place it on sale for an equivalent [...]

Value vs. Price: The Difference is Very Real2019-03-25T15:56:58-05:00

5 Best Oil and Gas Stocks to Contemplate While Oil Price is Low

Global oil production has been outpacing demand for over two years. This oversupply has pushed oil prices to lows not seen in more than 10 years, so it's a good time to start contemplating investments in oil and gas stocks. For consumers, this is a welcomed reduction in fuel prices. For independent producers, the price decline is causing extreme pain. According to Haynes and Boone, 42 energy companies filed for bankruptcy in 2015 and Deloitte believes 35% of the remaining energy companies are at risk of declaring bankruptcy [...]

5 Best Oil and Gas Stocks to Contemplate While Oil Price is Low2019-03-25T15:52:26-05:00

Stock Buyback – A Dividend Alternative

In the last newsletter we discussed a few of the inherent consequences of dividends. This article compares the dividend to one of its alternatives, the stock buyback. Stock buybacks, otherwise known as share repurchases, occur when a business purchases shares of its outstanding stock from the shareholders. Importantly, the fundamental value of the business does not change. The result is an increase in the ownership percentage of each remaining share. For example, if a company has 100 shares and is worth $100, each share is worth $1 and [...]

Stock Buyback – A Dividend Alternative2019-03-03T13:40:52-06:00

DividEND: Why it May No Longer Be The Best Option

Businesses should consider the objectives of their shareholders like you and me.  After all, we are the owners of the business. This article explores the dividend and suggests to businesses why the dividend may no longer be the best way to reward loyal shareholders like us. An upcoming newsletter will take a deeper look at an alternative, the stock buyback. How Investors Have Historically Used Dividend Dividend-producing businesses have long provided a steady stream of income to their investors. Historically, investors have depended on dividend income to fund [...]

DividEND: Why it May No Longer Be The Best Option2019-03-03T13:42:06-06:00

Investment Cost Matters And Here’s Why!

We'll begin with a telling quote about investment cost. “Whether markets are efficient or inefficient, investors as a group must fall short of the market return by the amount of the costs they incur.” – John Bogle So what does Investment cost mean? It's the cost of investing or the fees associated with particular investments such as commissions paid and annual fees. Market returns are unpredictable but investment cost can be known. When investing, you shouldn't assume that because you're paying higher costs, it means you're receiving a better [...]

Investment Cost Matters And Here’s Why!2019-04-07T14:40:26-05:00

Compound Interest

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”  ― Albert Einstein So what is the eighth wonder of the world, Compound Interest/Growth  Simply put, compounded interest is interest on top of interest and compounded growth is growth on top of growth. If you invested $100 today and the stock market grew at an average compounded annual growth rate of 9.11% your investment would be worth: $100 with a 9.11% compounded annual growth rate invested for [...]

Compound Interest2019-03-03T13:44:14-06:00

How to Define Your Investment Goals to Become Wealthy!

Why am I investing? What is my Time Horizon? What is my Risk? What is my Liquidity Requirement? These are all thought-provoking questions meant to aid in building a firm investing foundation. Once you've built the foundation, you can start choosing your investment goals. Investment goals are split into four categories based upon the risk/return tradeoff. This tradeoff infers that higher returns are associated with higher risk investments and lower returns are associated with lower risk investments. While this may not always be true with respect to any [...]

How to Define Your Investment Goals to Become Wealthy!2019-03-03T13:44:51-06:00

What Are Mutual Funds? ETFs, UITs, OEF and CEF Explained

Mutual funds may not have the same pizazz as choosing your own stocks but they do allow average investors to take advantage of low costs, diversification, and access to professional management. There is no legal definition of “mutual fund” but the term is most commonly applied to investment funds regulated and sold to the public. The four most often referred to mutual funds are: Open-end funds (OEF), Closed-end funds (CEF), Unit Investment Trusts (UIT) and Exchange traded funds (ETF). Open-end funds $17.1 trillion in holdings are currently the [...]

What Are Mutual Funds? ETFs, UITs, OEF and CEF Explained2019-03-03T13:54:25-06:00

What Are Investment Funds?

You've probably heard someone say it before but what are investment funds, really? An Investment fund is a vehicle in which multiple investors can aggregate their money towards a particular strategy. In other words, it's a supply of capital that belongs to numerous investors where each person has control and ownership of their own shares. Mutual funds, money market, and exchange funds are examples of investment funds. Understanding Investment Funds This type of investment can be split into two categories: public and private. A public fund is open to [...]

What Are Investment Funds?2019-03-03T13:55:02-06:00

ETF vs Mutual Fund

ETFs or Mutual Funds? Exchange Traded Funds (ETF) and Mutual Funds (MF) are investment vehicles that pool multiple securities into one fund, allowing investors like you and I to diversify efficiently.  These funds have become so popular that they account for more than $20 trillion in assets*. That $20 trillion has been more than enough market share to breed healthy competition between fund providers.  So how do we capitalize on this competition to maximize our investment return potential?  We learn the differences between ETFs and MFs that are material [...]

ETF vs Mutual Fund2019-03-25T15:36:18-05:00