When you’re new to investing it can be difficult to separate out the noise from the truth. There is a whole industry out there dedicated to keeping you updated with market events, telling you which stocks to buy, which stocks to dump, and when to do so.
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I don’t know why but I was lying in bed last night thinking about confirmation bias in stocks. So I thought I’d write a post about it.
See, if you don’t know what confirmation bias is, you might be making all sorts of little mistakes without even knowing it. Read more »
The price-to-earnings ratio, or PE ratio, is one of the simplest but most popular financial ratios for estimating the value of a stock. Even though the PE ratio is simple, it’s an amazingly useful tool.
In fact, a study by Merrill Lynch found that 33% of professional investment managers consider the PE ratio before investing in a company. And one of the most famous value investors of recent times, Peter Lynch, was known to make good use of the PE ratio in his analysis. Read more »
Regular readers of this blog will know that I am a fan of quantitative trading methods. I’m not a very good discretionary trader so I get around that fact by using rules to make investment decisions.
It pays off since it stops me second-guessing my trades and getting out at precisely the wrong time (which is what usually happens). Read more »
If you watch a lot of CNBC or read a fair amount of financial news you will no doubt have heard of the VIX Volatility Index, also known as the ‘fear index’.
What is the Vix Index?
The VIX is actually the ticker symbol for the CBOE (Chicago Board Options Exchange) Market Volatility Index future and it represents the expectation of stock market volatility over the next 30 days using S&P 500 options.
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I never recommend trading off tips. It doesn’t matter whether it’s your next door neighbour or Warren Buffett, if someone tells you to buy a stock you should always do your homework first before you put any of your own money on the line. Read more »