Technical Vs. Fundamental Analysis

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There are two main types of investment research: fundamental and technical analysis. Investors would do well to be familiar with both approaches. In fundamental analysis, stock is valued according to the financial data a company reports. These data are analyzed to predict the likely movement of that company’s stock price. At the Common Sense Investor, […]

How Do Dividends Work?

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Sometimes companies give some of their profits directly to their investors in the form of dividends. Dividends are the cash payments stockholders receive based on a company’s earnings. Not every company pays dividends, but you’ll find that a large portion of established stable companies do. Dividends are the only way, apart from using strategies around […]

Investing and the Psychology of Self-Deception

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The key to avoiding self-deception is to find an objective way to measure overall performance and then act on the results. I’ve got to confess. There have been times in my investing career when I’ve been the victim of self-deception. What does that mean? It means that I’ve misled myself into thinking that my investments […]

Financial Advisors: Do You Know Who Runs Your Money?

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The key to finding a good financial advisor is doing your homework. Make sure he has a solid track record and an understandable yet principled approach to investing. Many people today feel that they’re not qualified to invest their own money; that’s understandable, given how complex the investment world has gotten. But do you really […]

I Have Ten Thousand Dollars, How Should I Invest It?

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Where to start when investing? This is one of the most common questions that we see asked by beginning investors, especially those who have just come upon an extra ten thousand dollars (wouldn’t it be nice if it happened to more of us!). Are you ready for an unconventional, but simple answer? Ok, but first […]

Keeping Track of Mutual Fund Expenses

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The first step is to understand mutual fund expenses. The next step is to avoid them! Mutual funds are designed for people who want to minimize risk and volatility in their investments, maximize purchasing power by pooling their resources with others, and minimize the costs inherent in buying and selling stocks. But you might be surprised that […]

Pitfalls of Mutual Funds

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The pitfalls of mutual funds Just like any other form of investment, mutual funds also offer their balance of advantages and pitfalls. The common sense investor should always be aware of the potential downside to any investment medium. If you have plans of investing in mutual funds, keep these pieces of advice (and pitfalls to […]

Benefits of Mutual Funds

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The Benefits of Mutual Funds Ever since they were formed, mutual funds have been a favorite investment choice for the average investor. Mutual funds are simple, cost-effective and they offer a level of diversification that one simply does not get in an individual stock. With mutual funds, you entrust your money with a good financial […]