When it comes to , one of the most common pieces of advice you'll hear is to stay away from stocks with high Price-to-Earnings (P/E) ratios. But I’m going to tell you the first rule I follow when trading growth stocks: ignore the high P/E. If you let that single metric guide you, you’ll miss out on some of the biggest winners in the market.
Whenever Warren Buffett breaks down his approach to , he makes it sound deceptively simple. The strategy? Just buy a great company at a reasonable price and hold on to it for the next half-century. Looking back, it seems obvious that a company like Coca-Cola was destined for success. But honestly, how many of us have held that stock since 1988, when Buffett made his move?
So you’ve opened a brokerage account and you’re ready to start putting your money to work. The big question is: what should you buy first? For many people just getting into , the answer isn’t a single stock but an entire index.
I’ve always seen the stock market as one of the most powerful tools for building wealth ever invented. It’s a space that I firmly believe should be open to everyone, not just a select few. That’s why is a question more people should be asking. There’s a place for every kind of personality and strategy here.
If you're looking for the secret to investing, I’m confident that for most American families, the answer is surprisingly simple. It involves owning your stocks through a broad market index fund, like one that tracks the S&P 500, and your bonds through a total bond market index fund. Warren Buffett agrees, stating that for most people, the best way to own stocks is through a low-fee index fund—a path that will almost certainly beat the net results of the majority of investment professionals.
Back in 1993, while writing my book , I explored the countless asset allocation strategies available to investors. It struck me then that sometimes, “less is more.” I had a hunch that a simple, mainstream balanced fund—60% in U.S. stocks and 40% in U.S. bonds, all in a low-cost index format—could offer the same functional benefit as hiring a high-priced investment advisory firm.
When you’re just getting started with investing, it’s easy to get overwhelmed. But what if I told you that one decision accounts for nearly all of your results? For anyone , this is the place to focus. A landmark study found that a staggering 94% of the difference in portfolio returns comes down to a single choice: your asset allocation. This is the strategic mix of stocks and bonds you decide to hold. It's more important than picking the “perfect” stock or timing the market. Getting this right is the foundation for anyone treating to build long-term .
When you think of Benjamin Graham, the author of the 1949 classic , you probably think of value investing—the meticulous art of finding bargain stocks. But what many don't realize is that Graham had a very different message for the vast majority of people, one that feels surprisingly modern and is essential for anyone interested in .
Since the first index mutual fund launched back in 1975, the traditional, long-term approach to indexing has been a massive success. For anyone just getting into , it's a proven model. These funds, which simply aim to track a broad market index like the S&P 500, have consistently delivered returns that leave most actively managed funds in the dust. This is one of the most important lessons in .