No matter the vehicle was chosen to navigate, once a company enters the public marketplace, it becomes subject to the same interactions between the supply and demand for securities that shape equity prices each day.
Be wary of financial advertisers
Social media has been blamed for being the cause of many ills over the past decade. Being able to blatantly tell lies and distort the truth to a narrow group of people is regarded as a serious problem on social media. Much of the focus to this point has been on political campaigns, but the investment world is quickly catching up.
The greatest risk
Lurking just under the surface of the investment ocean is a risk waiting to devour retirees desperate for yield. It’s understandable: after all, a retirement portfolio is supposed to generate cash. But considering the current economic situation generating income is tough.
Should you expect unexpected returns with FAANG stocks?
Investment returns have two parts: the expected return and the unexpected return. The expected return is the best guess of what will happen based on all the information currently available. The unexpected return is the surprise, the difference between what does happen and what was expected. Investors should base their portfolio decisions on expected returns, not realised returns, and the two can differ by a lot.
Sentimental value can destroy monetary value
One of the staples of investment media and stock picking newsletters are the ‘if you had invested…” stories. The writer will pick a well-known stock, go back to a point in time (usually the IPO) and inform us how many millions we would have today, if only we had invested a specific dollar amount into that stock. It’s meant to make us feel like fools for not jumping aboard at the right time.
