The Buffett Strategy to Create a Virtuous Cycle of Wealth

A good investment policy is one that allows you to profit, reinvest those profits, and follow from a virtuous cycle of increasing returns over time. That’s the policy essentially used—in various forms—by Warren Buffett over the decades to become one of the world’s wealthiest individuals. Whether buying individual shares of stock or entire companies, the principle is the same. You want to find companies that can continue to grow over time at a somewhat steady and predictable rate. Growth companies won’t do. They may end up hitting the skids, and growth companies that fall out of f...
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How Young Warren Buffett Routinely Beat the Markets

There are plenty of ways to beat the market. Warren Buffett knows them all. For the most part, he’s also tried them all. Investors with small sums of money can fare well following the modern equivalent of the strategies a young Buffett used to outperform the go-go market of the 1960’s. For example, Buffett often made trades based on arbitrage opportunities. That’s where a stock has one price in one exchange, but a different price in another. Buy in the lower priced and immediately sell in the higher price, and you get an instant profit. Today’s fast-trading, information-efficient ...
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How a Mere $50 Can Get Your Investment Portfolio Started

Most folks think you need a few thousand dollars to start investing. If you follow a traditional route, that’s probably true. You’d need that much to fund a brokerage account and start buying a few stocks to start a nest egg. But there’s a way that you can get started investing for as little as $50. In many cases, it’s more. But the secret is a simple one. Companies that pay out dividends to investors often have a plan that lets you directly invest in their shares. And you can set up recurring payments to add to your stake. In return, the company will reinvest those shares for lit...
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Jump Start Your Income Today

Investing is a lifetime journey, and getting started can feel frustrating. That can be the case with income investing, where the first dividend check might just be for a paltry few dollars. While growing a dividend over time can lead to a powerful return, if you’re looking for high income now, there are plenty of opportunities available that can start showing you a much larger pile of cash relative to what you put in. These high-yield plays, typically paying in the 5-10 percent range, are companies that tend to be structured to pay out most of their income to shareholders. There are ...
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Buy Now, Get More than You Paid In Later (Year After Year)

There’s an ancient Chinese saying: The best time to plant a tree was 20 years ago. The second best time is now. It may seem like stocks go nowhere for long periods at a time. But many companies can use those periods to continue growing their dividends for shareholders. When that happens, buyers see the amount of cash they get rise every year. Over a long enough timeline, they could even see dividends rise to a point where they get more cash payouts every year than what they originally paid. This secret is a simple math equation known as the “yield on cost.” It involves the current...
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Buying is Only Half of Investing

Most investment research is based on one thing, and one thing only: Finding the best opportunities to buy. There’s nothing wrong with that. It’s a good thing in and of itself. After all, if you don’t make a good buy in the markets, you’re pretty much guaranteed to lose money. But what happens when things go well? That’s where the trouble starts. That’s because most investment research doesn’t tell you anything about when to sell a position you hold—whether it’s gone up or down. Many investors use rules like stop-loss orders. But that also causes them to lose their shares whi...
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The Crown Jewels in the Stock Market Kingdom

Companies come and go. The last component of the original Dow Jones Index, General Electric, got booted last year. But you could have been out of that name for far longer if you had followed a simple rule: Only invest in companies that deliver increasing income to shareholders every year by increasing their dividend. Following that rule would have gotten you out of a lot of stocks before they really took a dive—and kept you in some of the best wealth-building stocks of all time. In the end, researching the market for stocks that deliver great returns to investors over time will of...
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The One Surefire Way to Retire Rich

Imagine you had a penny that doubled in value every day for a month. Sure, after a week, you’d only have a paltry sixty-four cents. That’s not even enough to buy something off the dollar menu at your favorite fast-food joint. After another two weeks, you’d have less than $10. But if you can hold out for just two more weeks, the doubling power will turn that starting penny into $1.3 million dollars. That’s the power of compounding. Now, we don’t have magic pennies (that I know of). But we do have the next best thing: Dividend stocks. When companies pay their shareholders mone...
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The One Surefire Pattern for Massive Declines

Tech stocks in 2000. Gold in 2011. Cryptocurrencies in 2017. Pot stocks in 2018. They all followed the same pattern. They had massive gains. They started from small rises, but over time, they started to rise at a faster and faster rate. Speculation and greed took over. Any attempt to curb prices on the way up were swamped with buy orders instead. Along the way, a parabolic chart pattern started to unfold. That’s a tough pattern to trade—once every investor who wants in has gotten in, early investors reap large rewards. Once sellers start to outweigh buyers, the prices deflate near...
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Catch These Patterns for the Best Day Trading Profits

Most chart patterns can appear over any timeframe. But a number of unusual-looking patterns often take place over a shorter period of time, such as a day or an hour, or even less. These patterns may not look like anything at first, compared to typical continuation or reversal patterns, but they can lead to powerful returns in a very short amount of time as they unfold. From the oft-occurring ABCD trade to the cup-and-handle to flag patterns, these trades are perfect for jumping in and out of stocks and foreign currencies in the span of a few hours. These patterns show what traders...
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