Archive for October, 2010

Thursday, 21st October 2010

Dollar Cost Averaging

Written by George Traganidas Topics: Stock Investing, Wealth Building

A lot of people are trying to time the market, but very few are able to do it consistently. The old advice of buy low and sell high is not that easy to implement and many people end up doing the exact opposite. An easy way to invest in the stock market is dollar-cost averaging. Here is a helpful post from fool.com that explain how it works:

Let’s begin with a definition. Dollar-cost averaging is a fancy term for periodic investments of fixed sums of money. Simply put, dollar-cost averaging involves investing a set amount of cash ($100, $500, $1,000) at regular intervals (monthly, quarterly, yearly) into a stock, a group of stocks or a fund. The key to its success is consistency. Investing the same amount each time on a set schedule can really help grow your portfolio over time.[…]

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Thursday, 21st October 2010

Enterprise Value

Written by George Traganidas Topics: Stock Investing, Wealth Building

When you are evaluating a company you need many tools that will help you to look at the company in different ways. One such tool is enterprise value. Here is a very good article from fool.com that explains what it is:

When trying to determine the value for a given company, a metric that many investors use religiously is market capitalization, better known by the shortened, slightly sassier term “market cap.” It’s simple enough to figure out — all you do is multiply the company’s shares outstanding by its current share price.[…]

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Monday, 4th October 2010

The Art of Stock Valuation, part 1

Written by George Traganidas Topics: Stock Investing, Wealth Building

When you are looking to invest your money in the stock market you need to go through thousands of companies and decide which ones will prosper in the future and which ones will not. The way to decide which ones will prosper is more of an art than it is science. Unfortunately, there is no secret formula for this although many people have tried unsuccessfully to create one that will work over the years. Many of these theories have been created based on mathematical models and all of them failed in due course.

This series of posts will look at people who have been successful at picking prosperous businesses over the years and will try to reverse engineer their successful approach. We will look at both quantitative and qualitative measures that can be used to evaluate companies. The data available for each of these companies is so vast that we need to sort through it, ignoring the noise and concentrate on the key metrics that really matter.[…]

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