Category Archives : Invest Money

Articles on how to invest money online


Why Do Stocks That Have Been Dropped By Index Funds Outperform The Newer Stocks Added.

According to research from the great Dr. Jeremy Siegel, 82% of stocks that are removed from the S&P 500 go on to outperform the stock that replaced them in the index during the subsequent three-years.  This finding seems counterintuitive. If a stock gets added to the S&P 500,the FTSE 100 or any other major index for that matter it must be riding a momentum wave that has seen its valuation increase. Likewise, a stock that is removed from the S&P 500 must have been riding a wave of sluggish performance that warranted its exclusion from the index. So what’s the reasoning? To understand the mechanics of Dr Siegel’s finding, contemplate […]


Oil Investing – The Need To Think Long Term 4

As someone who is invested in the oil space via ownership stakes in BP, Exxon Mobil and Royal Dutch Shell, I am not too concerned with the price of oil dipping below $50 in recent weeks. When I took stakes in these companies, I realised that the price of oil will not double overnight. I knew that it will take a considerable amount of time for oil prices to recover. But when the recovery starts, I expect prices to shoot higher and that is why I am optimistic about the oil industry long-term. Oil has a huge tailwind in the form of the emerging global middle class. Global Prosperity and […]


Shire Stock Purchase – The Importance Of Low Dividend Yield and Fast Growth In A Portfolio

Regular readers will know that I have been a big fan of Shire as of late. The company has fantastic growth, a pipeline that is envied by other biotech’s and a management team that is astute and rational. The best part about Shire is the valuation with shares trading hands at a P/E of less than 13. When a company looks attractive, I always ask myself ‘is there something I am missing? Is there something that I am not seeing that is making investors trade the stock at such a cheap valuation relative to its peers.’ With Shire, I think the answer is that investors are overlooking this stock due […]


Are Brands Really A Competitive Advantage?

When it comes to analysing businesses, finding out if a particular company you are interested in has an economic moat (or competitive advantage) is one of the most important things. This is because firms with economic moats are able to earn outsized profits for long periods of time due to mean reversion not really affecting them. There are a number of economic moats to look for and if a company has one of these, you can be sure that the company in question will continue to earn higher than normal profits for a long time to come. One of the most common economic moats people look for is ‘Strong Brand […]


10 Cheap Stocks To Buy Using Different Valuation Metrics 4

Everybody loves to spot a bargain and investors scouring stocks are no different. But what many new investors fails to understand is that there is a difference between shares which are ‘cheap’ and those which offer genuine value. To help in identifying undervalued stocks, there are a number of ratios to look at. In this article, we will see which shares are cheap based on P/E ratios, PEG ratios and Price to Book ratios 1. Price to Earnings Ratio (P/E) P/E Ratio = current share price / earnings per share If Company A currently has a share price of 100p and is forecast to generate earnings per share of 20p […]


How Would Labour Nationalise National Grid, Energy, Rail, Mail and Water Industries. 1

Election 2017 fever is in full swing. Over the past week, all the major parties have released their manifestos. The manifesto which has caught the eye of most people is that of Labours with its radical plan of borrowing heavily to spend on welfare and pre-existing infrastructure. They key word here being pre-existing as Labour want to nationalise the National Grid along with the energy, rail, mail and water industries. Now I wouldn’t mind a government borrowing to invest in new insfustructure but in this case Labour wants to borrow to buy out infrastructure that already exists. But I digress and that is a topic for another day. In this […]


Snapchat IPO, Millennials and the Investing Lessons Learnt

It is common knowledge that millennial’s don’t invest as much as previous generations. There is a plethora of reasons for this with the most common being debt (student loans), stagnant wage growth and fear of another 2008 style crash. But this all seemed to change two month ago with the Snapchat IPO – millennials got excited about investing in the stock market for the first time in a long time. The following comes from the USA Today just a few days after the company went public in early-March: “Millennials have largely stayed out of the stock market, held back by student loans, recent memories of the last crash and financial […]


GlaxoSmithKline (GSK) Stock Purchases – Pound Cost Averaging My Way In To This Healthcare Giant 1

When I first decided to become a dividend growth investor, GSK is one of the first stocks I looked at. The company met the criteria beginner investors should look for. Namely, GSK has strong Free Cash Flow, a bullet proof balance sheet, good returns on capital (12%), strong returns on equity (15%) is an easy to understand business,has stable and predictable growth, has economic moats in its consumer business and it pays a hefty dividend. What also swung me to looking at GSK was the number of income fund managers holding this stock in their portfolio thus showing that the company is highly regarded in the wealth management world. The […]


The Only Way For Individual Investors To Outperform Is To Increase Time Horizons

A few weeks ago I read an investment write-up on a large-cap blue chip stock that is one of the largest and most followed in the FTSE 100 There was a comment that basically asked the following question: “What is your edge with this stock?” The implication of this question is that there isn’t any edge to be had with stocks of large and well followed companies, but there is an edge to be gained with small, under-followed stocks. The commonly held view among value investors is that you need to seek out stocks that are under-followed, in hopes of gaining bits of information that the market is not currently […]


Power Of Compounding Money Illustrated – Best Motivation To Start Saving Money Today 2

Let’s face it, saving money is hard. If it were easy, everyone would be able to do it effortlessly. We are conditioned to spend money today instead of saving and investing it so we can have more money in the future. For many people, savings must be forced. One way of doing this is by automating your savings so that 10% of each paycheque goes directly into your savings account. Whilst this is a great method to build up your savings account, I don’t like saving and investing money to be forced upon someone. I want people to actually want to save money. I believe that if people learn about […]