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Investing 101 Archive

  • Never has there been a time in market history when more people who think of themselves as investors were actually gambling with their money. From Wall Street to Main Street the lines are blurry. Just look at the trials of JP Morgan (JPM), where even the bank itself confused hedging risk with making an enormous bet; and Facebook (FB), whose IPO created a frenzy that has so far lost money for investors that rushed in. If it can happen to them it can happen to you. Mark Matson, the author of "Main Street Money" joined Breakout to discuss three signs that you're gambling with your money, not investing it.

    1. Stock Picking

    Matson says "the idea that you're going to have inside knowledge, or knowledge that nobody else has" and use it to pick stocks with better returns than the broader market is folly. Individual stocks are always more risky than a diversified portfolio. You're kidding yourself if you think otherwise. This rule applies not just to the go-to names like Apple (AAPL) but perennial value plays like Berkshire Hathaway (BRK).

    Matson advises that instead of hand-picking your portfolio of five to ten stocks, you must be much more diversified with exposure to 11,000 global stocks.

    2. Market Timing

    "The trick to investing is not buy and hold, it's buy and re-balance," he says.

    Read More »from 3 Signs You’re Gambling, Not Investing!
  • It sounds a little like an old Johnny Carson bit, but you know things are really getting slow when burger and beer sales start to disappoint. With the U.S., Europe, and Asia all trying to juice their ailing economies, it's clear that the era of slow growth is more than a passing trend, despite the fact that corporate profits continue to come in at or near record levels.

    It's a predicament that investors of all sizes must contend with, and for our next installment of Investing 101, we've brought in Jerry Webman, chief economist at Oppenheimer Funds and author of the new book MoneyShift, to take a closer look at how you can prosper under these circumstances. We've compiled a list of five key things you need to remember to make money in a slow growth environment.

    Know Your Needs: At one point in your life, you may have teased little old ladies who dipped their toe in the pool before taking the plunge. However, Webman says investors should do the same thing, no matter their age or the water temperature.

    "Start thinking about your needs and objectives before you invest," Webman says in the attached video, adding that you need to know how much money you are able to put at risk before dipping that proverbial toe in the water.

    Read More »from Maximizing Profit in a Slow Growth Economy
  • Hedge funds are often thought of as murky pools of capital, accessible only to the super wealthy. The only times the public hears anything about hedge funds are when they do something illegal or outrageously profitable. Generally speaking, these partnerships are much less secretive than you may think.

    To demystify hedge funds and explore ways that an everyday investor can benefit from their strategies, Breakout welcomed Maz Jadallah, founder of AlphaClone.

    What is a hedge fund?

    Jadallah says hedge funds are "an investment fund that has a much wider range of investment activities than a mutual fund." Broadly speaking, hedge funds have a mandate of making money, no matter what the market is doing.

    For instance, if the stock market is down big, such as it was in 2008, your vanilla mutual fund would be expected to fall with it. A hedge fund manager has no such excuse. Hedge funds typically get a management fee of around 2% per year and take a cut of the profits up to 20%. Whether or not these steep fees are worth it depends on the fund.

    Read More »from 3 Ways to Invest Like a Successful Hedge Fund

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(54 Stories)

ABOUT INVESTING 101

Breakout’s Investing 101 helps you gain insight on money management and trading. Whether you’re managing your own retirement account, just beginning, or an advanced investor in need of a good refresher, Investing 101 will help you learn, grow, and keep you informed of the basic steps to effectively manage your money. Expect investing tips that focus on trading strategies, asset allocation, and portfolio management.





Investing 101

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