Disciplined investing is rewarded by the financial markets because capitalism, by and large, works. For investors to put their capital at risk, there needs to be a commensurate expected return. This is finance. Everything else is just details.
Investors are rewarded for taking risks. That means that sometimes that return doesn’t appear. In fact, if you look at the equity premium, or the returns stocks minus the returns of short term US Treasury bills, it’s actually pretty rare for the premium to be close to the average.
— Read on retirementresearcher.com/the-art-of-disciplined-investing/
Category Archives: Investing
Understanding Bonds: Riding the Yield Curve
Rates on bonds of different maturities behave independently of each other with short-term rates and long-term rates often moving in opposite directions. By comparing long- and short-term bond yields, the yield curve describes future trends in bond returns.
— Read on www.kiplinger.com/article/investing/T052-C000-S001-riding-the-yield-curve.html
Bond Market: Why Is Everything Upside Down? | Charles Schwab
Bond yields in major developed countries declined sharply in mid-August, bringing the total amount of negative-yielding bonds around the globe to more than $16 trillion. The entire German yield curve is below zero. In the U.S., the 30-year Treasury yield fell below 2% for the first time in history, causing the yield spread between two-year/10-year Treasuries to invert briefly, for the first time since 2007. The three-month/10-year spread has been inverted on and off since March.
— Read on www.schwab.com/resource-center/insights/content/bond-market-why-is-everything-upside-down
If you want to understand how the world works, you need to understand bonds – MarketWatch
The stock market is quite a bit smaller, and frankly, it isn’t that important. People focus on it because stocks are easy to understand. But if you want to understand how the world works, you need to understand bonds.
— Read on www.marketwatch.com/story/if-you-want-to-understand-how-the-world-works-you-need-to-understand-bonds-2019-08-22
How to Become A Millionaire – 5 Steps to Becoming Wealthy
Want to know how to become a millionaire? Follow this 5 step process: Earn money, spend less than you earn, save, invest, and repeat. Then just add time.
— Read on cashmoneylife.com/how-to-become-a-millionaire-2/
Equity Volatility Does Not Spell Recession – TheStreet
A Recession Is Not Imminent.
Equities and bonds are worried about a recession.
With the escalating trade war with China, the odds of a U.S. recession have risen a little, to say a one-in-three chance. Still, we are hard pressed to see an actual U.S. recession.
— Read on www.thestreet.com/markets/equity-volatility-does-not-spell-recession-15065765
Yield Curve Inversions Do Not Cause Recessions
Without other catalysts such as escalating trade war or central bank over-tightening monetary policy, inverted yield curves do not and have not caused recessions. This requires repeating, inverted yield curves do not cause recessions.
An inverted yield curve can be a signal of a future economic downturn and recession; and, it can be a contributing factor to a downturn or recession if it creates fear and uncertainty that causes consumers to stop spending and/or financial institutions to stop lending.
Thus, the question being asked by investors is…”will there be a recession hitting the U.S. economy in the next twelve to eighteen months”? The answer is that no one knows for certain, but unlikely as long as the consumer remains strong. A second question investors are asking is whether there will be a recession in the next five to ten years? Answer…almost certainly, but, again, no one can say for sure.
The U.S. consumer remains strong and they drive 65% to 70% of the U.S. economy. The labor market also remains strong with unemployment at the lowest rate in over fifty years. Additionally, wages are increasing. Most economists concur that as long as the consumer remains strong and spending, it unlikely the economy will enter into recession.
NFL Channel – A Football Life: Bill Belichick
New England Patriots Head Coach Bill Belichick, was featured on a 2009 NFL Channel program A Football Life: Bill Belichick. The program was produced in 2009 at a time when the Patriots’ Coach Belichick along with his quarterback Tom Brady had won five Super Bowl Championships.
There are many lessons that can be learned from Coach Belichick. One lesson was his ability to focus on assessing and correcting the small aspects of the game on the football field. During one program segment, Coach Belichick was seen closely managing the aspects of the game plan needing adjustment.
‘Every battle is won before it is fought.” Sun Tzu
Another lesson learned was his very detailed pregame planning. In a pregame speech, Belichick stated to the Patriots football players that…”they know what to do, and they should go out and execute their respective position responsibilities aggressively”.
Also, he commented that…”they’ve worked hard and prepared thoroughly; they should celebrate when they or a teammate make a play”. He also stressed that they must play with energy and passion on the field. He indicated that the prior season, when they failed to achieve the team goals, the players were not playing with passion nor celebrating when a teammate made a play.
In the NFL, winning coaches, such as Belichick, must stay several steps ahead of their competitors or allow their competitors to catch and even surpass them. In pregame planning meeting with his coaching staff, he gamed planned what he expected the opposing team would do against the Patriots and what aspect of the opponents game or player they would take away.
It was obvious that Coach Belichick believed in focusing solely on the details of the game during the game”s sixty minutes and delay trash talking to after the game was over. During one game, he is seen commenting to a trash talking opposing team player…”let’s talk after the game and do you see the scoreboard”. In postgame analysis, win or lose, he was brutally honest with the team on what they did well and what they did poorly during the game. Especially, if he observed the team losing focus or failing to execute on the football field of play.
During an expected inclement weather football game, Coach Belichick repeatedly reminded his team that they were not playing the wind and wintry weather, but were playing a NFL professional football team. He wanted the Patriots to focus on the opponents and ignore the blowing snow and sleet.
‘Where you end is the only thing that matters in football and golf.’ Bill Belichcik
Coach emphasized that he was not afraid to go for it. Once, on a fourth and one on the Patriots own twenty-five yard line, he successfully went for the first down deep in Patriot’s own territory. A week later, it was fourth and two on the Patriots own twenty-eight yard line, he was unsuccessful going for a first down. Lessons learned from the experience, regardless of the comments from a plethora of second-guessers, “…do not be afraid to go for it and ignore the noise afterwards, if unsuccessful”.
Annapolis, MD, and the U.S. Naval Academy were Bill Belichick’s boyhood hometown and coaching apprenticeship. Bill’s father, Steve Belichick, was a scout for the U.S. Naval Academy’s football team. As a result, Bill spent countless hours shadowing his father during practices and games as his father coached the Navy football team. When not at Naval Academy football practices and games, Bill played on the local Annapolis High School football team.
Coach Belichick consistently stressed “…getting the team to play the way they need to play” to win. Especially on the road, it was important for the team to play with mental toughness. Competition is about getting up after each time an individual is knocked down. Also, he emphasized to his coaches and players that winning is all that matters in the NFL and in sports in general.
One additional lessons learned is to ensure the players know individually and collectively, as a team, what is expected of them. He also ensured that they understood what was at stake and that they execute the game plan accordingly.
He emphasized continuously that you do not dance around and celebrate an expected victory while time remained on the clock, regardless of the of the lead on the scoreboard. He further emphasized how one stupid mistake, one stupid play or one stupid penalty can end the season for the Patriots, especially in the post season.
When injuries occurred, he was quick to quip that a team…”played with the players on hand…with the hand you’re dealt”. And, once a game was concluded, don’t look back…the focus must be on preparing for the next game and opponent. This aligned with the U.S. Navy Seal’s motto…”the only easy day was yesterday”.
“When you leave here (motto located in Patriots locker room):
- Don’t believe or feel the hype
- Manage expectations
- Ignore the noise
- Speak for yourself”
In short, New England Patriots’ Bill Belichick has become the NFL’s most successful modern day football coach.
13 High-Yield Dividend Stocks to Watch
High-yield dividend stocks have gained even more allure lately in the face of shrinking bond yields. However, while a handful are ready buys right now, several more sport alluring yields – at least 5%, and up into the double digits – but need a little more time to simmer before it’s time to dip in.
Patience is a virtue in life. That’s particularly true in the investing world. It’s even true across investing disciplines. Sober value investors wait for their price before buying, but disciplined market technicians also know to wait for the proper setup before trading.
Sometimes, you need to wait for a fundamental catalyst to make your trade worth making. Other times, it’s simply a matter of waiting for the right price. But the key is having the self-control to wait for your moment. Lack of patience can be a portfolio killer.
“We tell our clients during the onboarding process that we won’t be investing their entire portfolio on day one,” explains Chase Robertson, Managing Partner of Houston-based RIA Robertson Wealth Management. “We tend to average into our portfolios over time as market conditions warrant, and we’re not opposed to having large cash positions. Our clients thank us in the end.”
Today, we’re going to look at 13 high-yield dividend stocks to keep on your watch list. All are stocks yielding over 5% that you probably could buy today, but all have their own unique quirks that might make it more prudent to watch them a little longer rather than jump in with both feet.
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3 Secrets to Retiring Rich
Your ideal retirement may involve a lot of travel, the purchase of a few big-ticket items, and decades of worry-free, work-free days. But it’ll take a large nest egg to get there.
If you want to to retire wealthy enough to achieve your goals, you have to begin planning immediately. Start with these three steps.
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