Diversification is based on prudence. Diversifying is to accept a lower return in exchange for a lower risk also.If an investor was able to know what is the most value will go up in the future would not need to diversify, since in that case would invest all his money on that value and get the maximum return.But in practice we do not know what that ideal value in advance so that the most prudent, even for very experienced investors, is to resort...more
Ideally find some way or system to detect the minimum (and maximum) of market movements. But it is not realistic. Some tools try to detect the minimum (and maximum) of each movement, such as graphic and technical analysis, Japanese candlestick or candlesticks, the analysis of money flows, etc.. But no tool is infallible and sometimes give false signals.Many investors expect to get advice from someone more experienced to tell them how far it will...more
It is commonly accepted that the vast majority of mutual funds fail to even match the performance of its benchmark index (IBEX 35, Eurostox 50, S & P 500, etc.). Long term. Some may beat during certain periods of time, but are not able to overcome long periods. There have been many studies on all mecados and the result has always been the same, mutual funds provide a long-term profitability below its benchmark. Only a tiny amount of funds has achieved and why their managers have come to the History of the Exchange, as Peter Lynch and John Neff .Because it could be concluded that outperform the indexes is extremely difficult, as professional managers of mutual funds fail to do so.But beating the index is not difficult. Since the indices do not include dividends paid by companies that make up enough to buy the shares comprising the index in the same proportion as the index weighted to obtain a higher return (Note: If you do not know how to calculate a stock index is to read this article that explains how to calculate these indices ). This would get a portfolio that exactly replicates the index (which would get the same return) but also cobraramos dividends paid by companies, which...more
The big Spanish banks (Banco Santander, BBVA, Banco Popular) and any other company, such as Iberdrola, have programs of reinvestment of dividends to its shareholders. For example, dividends that are charged to the shares of Banco Santander which are held in the portfolio are used to buy more shares of Banco Santander.To qualify for these plans only...more
The stock index (IBEX 35, Stock Exchange General Index of Madrid, S & P 500, Dow Jones, Eurostoxx 50, Xetra DAX, CAC 40, etc.) Do not include dividends paid by companies. This means that when, based on a particular index, a means of public communication that the stock is up X% in a given period in that calculation is not including dividends paid by...more
Average, or pyramiding, low is to buy more shares of a value that already has at prices below that made the initial purchase.Do it right or not depending on the value and the strategy that uses the inverter.I think when you trade should not be averaged down ever. It is a fatal error. If an operation does not evolve as expected at the time of opening should not commit more money on it. Money management and estabecimiento a maximum loss on each trade must be strictly observed. It is better to take a small loss and think about other operation that persist in being right and in danger of having to assume a greater loss.When investing in the medium / long term we must distinguish two cases:Averaging down to try to fix a bug: It should not be carried out. It is a case similar to the trading. If we were wrong the first time is better not to add more money into an investment that is not working as expected. Each new investment is something independent, new money should not be used to correct old errors. Do not engage in an operation goes well at all costs. It is best to assume the errors, even assuming a loss, to continue putting more money into a company just to refuse to recognize a...more
The Spanish stock market is one of the cheapest (in terms of transaction costs), efficient and transparent in the world. In addition, many Spanish companies are among the strongest and best managed in the world. It is therefore logical that a large...more
Financial agreements can be accessed by any two people who are married or are preparing to marry. Financial agreements are binding - in that sense they are very hard to overturn - but they do need to satisfy the official requirements specified in...more
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Many Americans worry about retirement planning. Financial advisors with a certificate from a retirement institute can help navigate the complexities of retirement planning. About 50% of US workers over the age of 45 do not know what they need in...more
It is tempting to call binding financial agreements pre-nups, but this ignores most of the picture. Binding financial agreements may appear at any time before, during and after a marriage ends. In essence, these describe the whole process of what...more
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