stockmarket

THOUGHTS ON A FREQUENTLY REFERENCED BOOK ON INVESTING: THE INTELLIGENT INVESTOR

Posted on by Joseph M. Brennan Jr.

I thought “The Intelligent Investor” by Benjamin Graham was probably one of the more boring and tedious books I have ever read. It was a real chore to get through, but I finally did. As with other books I have read that were equally painful to read, there are always at least a few golden nuggets. Most of it I already knew and regularly practice but there were a few that I plan to take a closer look at. Here are the notes I that I thought were the most worthwhile to capture which might be helpful to some of you out there:

The stock market is a pendulum that swings between extremes. The Intelligent Investor sells to extreme optimists and buys from extreme pessimists. JOE BRENNAN COMMENT: For example, back in 2020, I bought from extreme pessimists during the Covid-19 Pandemic when everybody told me I would lose a lot of money due to the depression era scenario people were projecting. Instead, I had my best year ever in the stock market – ending the year with a 164% gain and nearly tripling my savings (my second best year ever was a 73% gain back in 2015). You can see my annual gains by scrolling through the following post: https://brighterdayslifecoaching.com/final-stock-market-score-joe-57-2-spx-24-2/?fbclid=IwZXh0bgNhZW0CMTAAAR2NxxPprNNXvETFlCdOfnAo3XrJhm-ftT4126p0ffFDwW0hDxljtD283Os_aem_UkGQjO1yZfmZofmHzWP5Jg . Back in 2021, I sold to extreme optimists and got completely out of the bond market – avoiding a 46% loss over nearly 3 years. This was very unusual for the bond market when considering its longer-term history as a low-risk, safe haven investment. Those losses were more typical of a stock market decline than a bond market decline. You can read all about that here: https://brighterdayslifecoaching.com/a-break-in-the-clouds-the-return-of-low-risk-safe-haven-investments-via-the-bond-market/?fbclid=IwY2xjawH2rGlleHRuA2FlbQIxMAABHdx_gloyTm9no0SWUH8TGpFE2vZZswZT093eCilUTfhWytmhlahiw1zJOg_aem_fG69Yr-CMag1UE-QiQV9QQ (the link to the previous bond market post is also contained in that post).

If you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing discipline and courage, you can avoid letting other people’s emotions and mood swings influence your longer term gains. The way your financial investments behave is much less important than how you behave as an investor.

Frequently bullish investors have historically said things like: “Is the stock market riskier today than two years ago just because prices are higher? The answer is no.” Well, no. The answer is yes. It always has been. It always will be.

One way to value stocks is: % earnings growth (perhaps use a historical average: 1.5%-2.0% in 1972 looking back) + Annual Inflation Rate (perhaps use a historical average – 2.4% per year in 1972) + Dividend Yield (1.9% in 1972 for SPX?) = 1.5%-2.0% + 2.4% + 1.9% = 5.8% – 6.3%. For this scenario, that means you can reasonably expect stocks to average about a 6% return (3.6% after inflation).

To the extent that the investor’s funds are placed in high-grade bonds of relatively short maturity – say, of 7 years or less, he will not be affected significantly by changes in market prices and need to take them into account. Longer-term bonds can have wider price swings during their lifetimes.

Price fluctuations have only one significant meaning for the true investor. They provide the opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. True investors can pretty much ignore all other price points and simply wait patiently.

If you put much of your portfolio on permanent autopilot, you can fight the prediction addiction, focus on the longer-term, and tune out Mr. Market’s mood swings. JOE BRENNAN COMMENT: I rarely make predictions because people tend to become married to their predictions which could lead to substantial losses when the predictions are wrong or badly timed.

Top performing mutual funds and stocks from previous years are frequently the investments of choice by newer investors which leads to underperformance due to newer investor money being put to work at higher prices of the underlying stock issues and other reasons. JOE BRENNAN COMMENT: High performing stocks tend to generate strong interest from newer investors which leads to underperformance since newer money is being invested at higher levels which invariably leads to underperformance over time. The opposite could be said about certain low performing stocks.

Beware of excessive one-time expenses and charge offs when the stock market has a bad year. When the overall markets are doing bad, investors expect poor individual stock performance. So many companies will make the losses in that year appear so substantial that the profits in following years will be artificially high. One way to overcome this year-to-year fluctuation due to special one-time charges and such is to use the average earnings over the past 7-10 years when attempting to value a stock via its PE ratio and such.

A good way to determine earnings growth can be taking the average earnings over the past 3 years and comparing that to the average over 10 years. Another good thing to do is compare the PE ratio of the company with the PE ratio of the major market index it falls in. 15 or less is probably a good number to target for PE and a number substantially less than the PE ratio of the associated stock market index. A good way to calculate current PE is using the current price and dividing by the average earnings over the past 3 years.

E/P ratio (inverse of PE) needs to be at least higher than the interest rate of high-quality bonds at the time for the stock to even be considered.

An investor can always prosper by looking patiently and calmly through the wreckage of a bear market. If you build a diverse portfolio of stocks whose current assets are 2+ x their current liabilities, and whose long-term debt does not exceed working capital, you should end up with a group of conservatively financed companies with plenty of staying power.

Price/Book should be 1.5 or less.

Managers prefer doing share buybacks over increasing dividends because increasing dividends lowers the value of their own stock options while share buybacks increases the value of their own stock options.

Margin of Safety for Corporate Bonds: Compare the total value of the company with the total amount of debt. If the business owes $10B and is fairly valued at $30B then there is room for shrinkage of 67% in value before the bondholders will suffer loss.

There are large inefficiencies in the stock market and market prices are often nonsensical. By being a diligent investor, you can readily take advantage of gaps between price and value at both extremes – when prices are excessively high and when they are excessively low.

Credit ratings on bonds are frequently indicative of the quality of a company and its stock. The lower the yield on bonds or preferred shares, the more likely the stock is to provide a satisfactory investment, and the smaller the element of speculation involved in its purchase. However, be careful to ensure you buy the stock at a good price. Frequently, high quality companies are priced high due to investor excitement, excessive optimism, and such.

The higher the growth rate you project, and the longer the future period over which you project it, the more sensitive your forecast becomes to the slightest error.

The margin of safety is the difference between the earrings dividend (1/PE) + dividend of index or stock and comparing that to the interest rate on bonds. For example, for SPY [PE (trailing 12 months -ttm) of SPY is 27.45 and the dividend 1.21%] the present margin of safety to buying it today would be 3.64% + 1.21% = 4.85% – 4.65% =0.20/4.65 = 4.3% margin of safety which is far too small to risk putting money in the stock market. A good target is at least 33%.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing. So, use any downtime you might have to your advantage by gaining this knowledge and learning these skills and techniques (https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/).

Make it your goal to learn these investment techniques so that you can progress towards achieving the financial freedom and independence you’ve always dreamed of. I would have done so much better if I had learned this stuff years ago!

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond).

#selfimprovement, #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket

HAPPY NEW YEAR 2025! A FEW HIGHLIGHTS FROM 2024!

Posted on by Joseph M. Brennan Jr.

Happy New Year everyone! 2024 was a pretty good year for me. The three best surprises for me this year were the following:

a. Indie 617 Boston streaming radio station: I’m a big fan of indie pop music and usually listen to WPRK in Winter Park – however they frequently play off-genre music that I don’t like as much, so discovering Indie 617 Boston was an excellent find. I found this streaming radio station while road-tripping on the west coast. Two of my favorite songs of the year were burning up the airwaves on this radio station over the summer (and beyond): Neverender by Justice and Tame Impala (https://www.youtube.com/watch?v=47YNsf-7Y7c) and Starburster by DC Fontaines (https://www.youtube.com/watch?v=KHocVRUlvkk). Other favorite indie pop tracks for me this year were Image by Magdalena Bay (https://www.youtube.com/watch?v=DfcWOPpmw14) and Sadie by Goth Babe (https://www.youtube.com/watch?v=EhS52bvzkec). I discovered each of these songs via Indie 617 Boston.

b. Seville Spain, Portugal (especially Porto, Sintra, and Lagos, Sintra), Seattle WA, Eureka CA, and Astoria OR. These were such wonderful places to visit.

c. High performing stocks I owned this year: COIN (126% gain), VMEO (64% gain), and GNK (51% gain).

In addition to the wonderful surprises above, I ended up exceeding each of the goals I had set for myself at the beginning of the year. One of my longstanding goals was to populate my life coaching website (https://brighterdayslifecoaching.com/) in such a way that it largely reflects my life work (outside of work) as a legacy/leave behind. This life work matters much more to me than anything I did that was job-related over the years. And now it is all in one place – my website.

I started out 20+ years ago focusing on self-help and happiness, and coaching in/writing about those areas. I later realized that since I was also a finance/investing expert, that I should coach in and write about those areas as well and populate my website with that information.

My latest goal for this year was to expand my website further by focusing on the creative aspects in terms of my poetry and such. My 2024 year-end goal was to digitize my first book of poetry, “A Farewell to Reason,” since the hard copy was out of print. Not only did I achieve that, but I also published the second book of poetry that I wanted to publish back in 2004 but never did: “Burning . . .  Burning Blue,” and have populated the poetry section of my website with not only the top poems I have written over the past 33 years but also all 370 poems I have written over those years and color-coded them by mood/interest (https://brighterdayslifecoaching.com/poetry/).

Here are the year’s highlights (by the numbers):

16: The number of times I provided special gifts to people for “Make a Friend Smile Day.” That’s the special occasion I created 20+ years ago as the perfect excuse to offer guilt-free giving to people going through financial difficulties, hardships, and such but are just too proud to ask for or accept this help. The only catch is the friend must smile when using the gift because, well, there’d be no reason to have a “Make a Friend Smile Day,” if the friend didn’t smile. I helped multiple people out this year with rent, groceries, car problems, and other financial hardships. I pulled money out of my “Beneficiaries Reserve Fund” to do this which is the fund I use to help others. Most people who know me understand that whenever I have a good year in the stock market, I always set aside some of the proceeds to help others – it’s a promise I make every year to God, higher power, the universe, or whatever it is you believe in (I happen to believe in all the above).

15: The number of poems I wrote and published throughout the year. The top four (4) that people seemed to resonate most with were:

a. BLISTERS, BURNS, AND BLURS (A SCREAM BEHIND THE DOOR): https://brighterdayslifecoaching.com/%e2%98%86%e2%96%aa%ef%b8%8e-a-blisters-burns-and-blurs-a-scream-behind-the-door-%e2%96%aa%ef%b8%8e-%e2%98%86/,

b. CHASING THE WAVES (OF THE L.A. HAZE): https://brighterdayslifecoaching.com/%e2%98%86%e2%96%aa%ef%b8%8e-chasing-the-waves-of-the-la-haze-%e2%96%aa%ef%b8%8e-%e2%98%86/,

c. THE FALL OF WINTERTIME: https://brighterdayslifecoaching.com/%e2%98%86%e2%96%aa%ef%b8%8e-the-fall-of-wintertime-%e2%96%aa%ef%b8%8e%e2%98%86/, and

d. CURIOSITY CLEARLY SEES (AND WARMLY BELIEVES): https://brighterdayslifecoaching.com/%e2%98%86%e2%96%aa%ef%b8%8e-curiosity-clearly-sees-and-warmly-believes-%e2%96%aa%ef%b8%8e%e2%98%86/

28,000+: The number of photos I took on travel this year. My biggest trips were my Portugal/Spain trip (5 weeks, 24 new places) and my summer road trip on the West Coast (14 new places over 4 weeks: Washington state, Oregon, and Northern California). My favorite places during this year’s travel were Seville Spain, Porto Portugal, Sintra Portugal, Lagos Portugal, Monterey/Pacific Grove CA, Seattle WA, Eureka CA, and Astoria OR.

126: The percentage gain of my best performing stock this year: Coinbase (COIN). Regarding COIN, if I had stuck to my more usual investing strategies, I probably would have sold all of my shares back in February and not realized all of the gains I achieved. COIN ended up being my top performing stock this year by far gaining 126% [my second and third best performing stocks were VMEO (64% gain), and GNK (51% gain)]. Towards the end of 2023, I somehow got the insight to treat COIN differently than my other investments. The strategy I used for this highly volatile stock was to sell 1/3 of my shares when COIN gained 33%, and buying more shares whenever COIN dropped 33%. This strategy really worked well and allowed me to experience much higher gains than I ordinarily would. I plan to stick with this strategy in 2025.

324: The total number of places I have explored and spent quality time in to date (including the above travel).

13.1: The percentage I gained in the stock market this year which far exceeded my financial goal for the year (you can read all about that here: https://brighterdayslifecoaching.com/final-stock-market-score-joe-13-1-inflation-3-3/). Since I have far exceeded my financial goal, my primary financial objective was maintaining my spending power by beating inflation or at least not giving back the stellar gains I achieved over the past decade or so (my 12-year average annual gain through and including the losses from 2022 was 35% as you can see by scrolling through the following post: https://brighterdayslifecoaching.com/final-stock-market-score-joe-57-2-spx-24-2/). Core inflation was 3.3% year-over-year back in November – so I beat that number by a sizable margin (the December numbers have not yet been released). I updated my investment strategies this year as I try to do every year. When I traveled through Portugal back in spring, people I met there became very interested when they found out I was a life coach – asking me for help with finances and investing so they could create a brighter future for themselves. This inspired me to write the Joe Brennan 6-Step Process to Financial Success with minimal effort post: https://brighterdayslifecoaching.com/how-to-invest-well-and-create-a-brighter-future-with-minimal-effort/. I followed this post up with a second post designed to help people even further with finance and investing: https://brighterdayslifecoaching.com/a-simple-lesson-in-finance-why-investing-invigorates-and-debt-devastates-your-finances/. So, I encourage you to read these two posts when you get the chance. You’ll become a much better investor if you do.

41: the number of people I helped live happier lives throughout this year – even internationally when I visited Portugal and Spain.

18: The number of times I posted about my stock market activities and strategies to offer others a chance to capitalize on these. You can read about them here: https://www.brighterdayslifecoaching.com/stock-market…/

149: The number of posts I wrote and published, throughout the year, focused on helping people live happier, offering hope and inspiration, keeping people informed, and making people more successful in life.

205: The number of days I spent on Duo Lingo learning and practicing Spanish and Portuguese throughout the year. I’ve been learning various languages on Duo Lingo for 10+ years now including Spanish, Portuguese, and a tiny bit of Italian.

11 – the number of hours I spent on fitness activities in a typical week between weight training, running, stretching, and yoga.

1: The number of books I read and shared my notes on throughout the year. I had so much else going on in 2024 that I didn’t do much reading. So, I suppose I should seek to read a little more in 2025. The books I read were primarily in the areas of self-help and self-improvement. I’ve been reading books on the “100 Best Self-Help Books of All Time” list (over the years I’ve currently read the top 90 books on this list of 100 so 10 more to go!).

So, 2024 was a pretty good year overall. Going forward I plan to focus on doing more reading, doing more travel, and writing new poetry. I’m looking forward to seeing what 2025 brings.

Happy New Year everyone! Normally, I would add something like: “May 2025 be the best year of your life, EVER.” However, this year I’d like to create a tiny challenge for everyone and change that to: “Do positive things to make someone else’s 2025 the best year of their lives, EVER.” So, decide who will be on your list of people for making that happen, and add that to your 2025 New Year’s resolutions list.

Thank you!

#selfimprovement #selfhelp #selfdevelopment #intention #fulfillment #success #inspiration #happiness #mindfulness #peace #joy #positivethinking #balance #finance #stocks #investing #stockmarket #bonds #bondmarket

FINAL STOCK MARKET SCORE =>>> JOE: 13.1%, INFLATION: 3.3%

Posted on by Joseph M. Brennan Jr.

FINAL SCORE =>>> JOE: +13.1% INFLATION: +3.3%

I had a pretty good year in the stock market this year. Many of you probably recall, I worked hard at getting myself back to being a low-risk investor over the past couple of years – and in 2024 I finally achieved that. So, my primary financial objective for 2024 (which will continue from this point forward) was to get back to being a low-risk investor – maintaining my spending power by beating inflation or at least not giving back the stellar gains I achieved over the past decade or so (my 12-year average annual gain through and including the losses from 2022 was 35% as you can see by scrolling through the following post: https://brighterdayslifecoaching.com/final-stock-market-score-joe-57-2-spx-24-2/). Core inflation was 3.3% year-over-year back in November – so I beat that number by a sizable margin (the December numbers have not yet been released).

Anyone who has met or exceeded their financial investment goal should be a low-risk investor like me. Everyone else should be taking a higher risk approach in order to achieve their financial investment goals. And if you need help with that, you know who to ask.

I adjusted my investment strategies this year as I normally do every year. For example, regarding Coinbase (COIN), if I had stuck to my more usual investing strategies, I probably would have sold all of my COIN shares back in February and not realized all of the gains I achieved. COIN was by far my top performing stock this year gaining 126% [my second and third best performing stocks were VMEO (64% gain), and GNK (51% gain)]. Towards the end of 2023, I somehow got the insight to treat COIN differently than my other investments. The strategy I used for this highly volatile stock was to sell 1/3 of my shares when COIN gained 33%, and buying more shares whenever COIN dropped 33%. This strategy really worked well and allowed me to experience much higher gains than I ordinarily would. I plan to stick with this strategy in 2025.

When I traveled through Portugal back in spring, people I met there became very interested when they found out I was a life coach – asking me for help with finances and investing so they could create a brighter future for themselves. This inspired me to write the Joe Brennan 6-Step Process to Financial Success with minimal effort post: https://brighterdayslifecoaching.com/how-to-invest-well-and-create-a-brighter-future-with-minimal-effort/. I followed this post up with a second post designed to help people even further with finance and investing: https://brighterdayslifecoaching.com/a-simple-lesson-in-finance-why-investing-invigorates-and-debt-devastates-your-finances/. So, I encourage you to read these two posts when you get the chance. You’ll become a much better investor if you do.

Amazingly, as a low-risk investor, I ended up beating three of the major market indexes this year: the Dow Jones Industrial Average index’s end-of-year (EOY) gain (+12.9%), the Russell 2000 index’s EOY gain (+10.0%), and the S&P 500 Midcap 400 index’s EOY gain (+12.2%). I didn’t come close to achieving the gains of the two other major market indexes this year such as the S&P 500 index’s EOY gain (+23.3%) and the Nasdaq index’s EOY gain (+28.6%). But that’s okay because as a low-risk investor, I should not be matching those gains – and whenever the overall markets drop, I’ll be thankful that I’m taking a low-risk approach.

My primary objective for 2024 was beating inflation which I was able to handily do. A secondary target I use as a low-risk investor is taking the end-of-year gain of the S&P 500 (SPX) and dividing by 5. I handily beat on that metric as well (23.3%/5 = 4.66%). So, overall, 2024 was a highly successful investment year for me. We’ll see what 2025 brings.

I’ve pretty much sold all of my stocks (I am presently only about 6.5% invested in stocks – the remaining 93.5% is in low-risk income) and am now awaiting a sizable drop before buying back into the stock market. My current estimate is that the stock market is about 20% overvalued. As such, as a low-risk investor, I plan to start slowly buying back into the stock market after about a 15% decline in the S&P 500 index (SPX) overall. Those who are higher risk investors should probably plan to buy back in after about a 10% drop or so.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing. So, use any downtime you might have to your advantage by gaining this knowledge and learning these skills and techniques (https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/).

Make it your goal to learn these investment techniques so that you can progress towards achieving the financial freedom and independence you’ve always dreamed of. I would have done so much better if I had learned this stuff years ago!

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much investing success for 2025 (and beyond).

#selfimprovement, #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket

A SIMPLE LESSON IN FINANCE: WHY INVESTING INVIGORATES AND DEBT DEVASTATES YOUR FINANCES

Posted on by Joseph M. Brennan Jr.

Here’s a simple lesson in finance for those who might need it: Investing money substantially increases your finances overall while carrying debt does much worse than the opposite. And the difference is astounding.

A simple common expression used to demonstrate how investments grow over time is called “the rule of 72.” The average interest rate expressed as a whole number times the number of years required to double an initial investment equals 72. Let’s take a look at how this simple rule can impact your finances. Let’s start with investing first.

Imagine you invested $10,000 earning 8% interest (8% is a reasonable figure given that the long-term average earned in the stock market has historically been about 7.5% – it has been much higher in recent years but at some point it could revert back to its long-term average). This means, using the rule of 72, that your $10,000 initial investment will become $20,000 in 9 years (8 x 9 = 72), $40,000 in 18 years, $80,000 in 27 years, and $160,000 in 36 years. And that is all from just making a single, one-time, initial investment of $10,000 at the beginning. I want you all to stop and think about that for a moment: Your $10,000 grew to $160,000 by doing nothing else. This is how compound interest works and how you make your money work for you – instead of against you.

Most people will do much better than the above because they will continue adding to their investments over time – and as long as they do not remove money from their investment (a mistake many people make by the way), then the power of compound interest will continue working in their favor.

The above example also illustrates why starting saving and investing at an early age is very important. And if you want to learn how to how to invest well and create a brighter future with minimal effort, please read this: https://brighterdayslifecoaching.com/how-to-invest-well-and-create-a-brighter-future-with-minimal-effort/

Now, let’s take a look at the opposite side of things to see how debt can devastate your finances. Imagine you had the same $10,000 as credit card debt at a 24% interest rate (24% is a little high by today’s standards – credit card rates presently average about 21% – but are higher for people with lower credit scores) but using 24% simplifies calculations and makes it much easier to compare both sides of the story between investing and debt.

Using the above figures mean, using the same rule of 72, that for your $10,000 in initial debt, you will end up paying $20,000 in 3 years (24 x 3 = 72), $40,000 in 6 years, $80,000 in 9 years, $160,000 in 12 years, $320,000 in 15 years, and $640,000 in 18 years if you didn’t make any payments at all (Note: this is not realistic since most people make at least the minimum payments – which largely reflect the payments on interest only – I’m just trying to demonstrate how much more quickly and deeply debt impacts your finances as compared to investing your money). And that is all just from having an initial debt of $10,000. I want you all to stop and give this some serious thought: Your $10,000 of initial debt grew to $640,000 in only 18 years. This is how debt can quickly, deeply, and easily devastate your finances.

Most people would do much worse than the above because they won’t stop at the initial debt – but will continue adding to their debts over time up until reaching their credit limits – which means the power of compound interest continues working against them.

Let’s now compare the two: In 18 years, your $10,000 investment grew to $40,000 but your $10,000 in debt became $640,000 over the same period of time. This illustrates why so many people get so far behind in their finances, and the simple but very important lesson in finance is this: Make your money work for you over the longer term instead of working against you by living with a strong sense of financial discipline – eliminating debt and investing your money instead. I have no objection to people having credit cards and such to help build up their credit scores and such but get into the practice of paying them off every month so you don’t have to pay interest or fees. If you do this and invest in your future, then you will create a brighter future for yourself and others in your life for the years and decades to come. So, do this if you can.

Again, the above isn’t truly accurate on the debt side of things because it reflects the overall impact if you made no payments at all – I have not factored in the fact that when you make the minimum payments on credit card debt, you are usually paying the interest. So, the interest portion of that debt isn’t working against you the way the much larger debt portion is. However, the interest only payments tend to be quite large (and provide no benefit since they typically pay little to nothing down on the debt portion) and, between that and the debt overall, it would still have a devastating effect on your finances as a whole in a short amount of time and would have required a more complicated calculation to get more precise numbers. I’m really just trying to illustrate the basic concepts of investing versus debt using simple calculations so that people can easily understand why debt can be so devastating in a short amount of time and why the power of compound interest works in their favor on the investment side of things. Also, rest assured the credit card companies will cut you off long before you reach such excessive numbers in terms of your debt to them for their own, financial well-being. However, the impact to your finances would be substantial.

You can read more about my finance and investing tips here: https://brighterdayslifecoaching.com/category/financial-planning-management-and-investing-related-posts/

You can learn about my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.

And, lastly, you can read about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities

I wish you much finance and investing success for 2024 (and beyond!).

#selfimprovement #selfhelp #selfdevelopment #intention #fulfillment #success #inspiration #happiness #mindfulness #peace #joy #positivethinking #balance #finance #stocks #investing #stockmarket #bonds #bondmarket

A BREAK IN THE CLOUDS: THE RETURN OF LOW-RISK SAFE HAVEN INVESTMENTS VIA THE BOND MARKET

Posted on by Joseph M. Brennan Jr.

For the first time in nearly 3 years, I am starting to return to the “low-risk, safe haven” bond market and bond fund/ETF investments. I wrote about the risks previously in January/February 2021 (TWO BIG INVESTMENT CONCERNS RIGHT NOW: RISING BOND RATES AND RISING INFLATION | BRIGHTER DAYS LIFE COACHING® and STORM CLOUDS ON THE HORIZON: THE BOND MARKETS AND THE “LOW-RISK SAFE HAVEN” FACADE | BRIGHTER DAYS LIFE COACHING®). Since writing those posts nearly three years ago, longer-term bonds and bond funds/ETFs have dropped 46% which is very unusual for the bond market when considering its longer-term history as a low-risk, safe haven investment – these losses are more typical of a stock market decline than a bond market decline. Due to this outsized drop and other factors, longer-term bonds and bond funds/ETFs have now become very attractive in my opinion – and I will continue buying into them on any future weakness.

Some of the reasons I think longer-term bonds and bond funds/ETFs might be a good investment going forward include the following:

1) The high interest rates (and the corresponding low bond prices since interest rates and prices on bonds are inversely related) is likely to make the United States (and other nations) inclined to provide less fiscal support and/or higher taxation in future years due to the higher cost of servicing debt – inflation would be another contributor to this,

2) The hesitancy of the Federal Reserve to provide as much economic support in the future as they have in the past in terms of interest rate reductions and Quantitative Easing (QE) for buying bonds and such,

3) a deteriorating economy and corporate earnings due to the combination of the above two factors which is likely (at some point) to result in substantial stock market declines and corresponding gains in low-risk, safe haven investments such as bonds and bond funds/ETFs. Much of the gains experienced in the stock market tend to be earnings, economy, and policy related.

These are some of things I’m seeing on the horizon right now. Lots of things to ponder and position for – especially since historical, low-risk, safe haven investments seem to be poised to regain their previous luster in the years to come. As such, perhaps one of the better longer-term investment strategies might be to start buying into longer term bonds and bond funds/ETFs.

For perspective, take a look at the 10-year, 20-year, and 30-year treasury yields (prices move in the opposite direction of yields) which had been falling for 40 about years but are now starting to normalize a bit. The last time they went up consistently was during the 1960s and 1970s but are now starting to rise again.

The bottom line is the prices of bonds and bond funds/ETFs are starting to normalize a bit which means substantial gains could be experienced by bond market and bond fund/ETF investors in the years to come. So, it might be wise to start positioning accordingly.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/).

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow!

#finance #stocks #investing #stockmarket #success #bonds #bondmarket

HOW TO LOSE YOUR SHIRT IN THE STOCK MARKET WITHOUT LOSING YOUR SHORTS TOO (PART FOUR)!

Posted on by Joseph M. Brennan Jr.

It’s always a good idea to adjust your investment strategies over time. Those of you who have been following me closely know that I had a real “knack” back in 2022 for picking losing stocks. However, I refused to let them go and continued buying into them as the buy signals got stronger with every drop, and they became more and more attractive, with respect to all of the indicators I use to make investment decisions. And, as usual, I generally refuse to sell on “buy” signals and frequently do the opposite. I wrote about this back in March and April and didn’t realize at the time that this would become a multi-part series but that is how things played out. Here it is many months later and I am still fighting the downs and ups and downs of what has been a highly volatile stock market over the past year (most of which have been downs). The fight continues but it appears my latest strategies have worked extremely well.

The strategy I used for much of 2022 involved continuing to buy stocks I owned which dropped substantially. However, later in the year I changed this strategy by trying to find new stocks which appeared to be just as attractive and buying those instead. That allowed me to take losses – when sensible to do so on the losing stocks – without invoking the wash sale rule – plus it didn’t allow certain stocks to dominate the performance of my portfolio as much as they had in the past. You can read about my previous strategies and how they evolved throughout 2022 by seeing part one, part two, and part three of this series.

There’s no question about me having a pretty lousy year in 2022 – it was my first down year in 11 years – but sometimes that will happen as an investor. The low point for me was when I was 142% invested (yes – I was using margin) and down 41.19% for 2022. At the end of 2022 I was 96% invested and down 23.6% for the year. So, things improved as the year progressed.

Is there any guarantee a given strategy will work? Of course not. Investing is primarily about making decisions based on various indicators, the associated likelihoods, and employing strategies accordingly. So, at best you can position yourself for a potential favorable return, but there is never a guarantee.

If I had not evolved my techniques and continued using my previous investment strategies, I would have been down 70% by the end of 2022. So, I’m very thankful that I modified my investment strategies throughout the year. As a point of reference, Kathy Wood’s ARKK stock gained 150% back in 2020 (nearly as much as my 164% gain), lost 23% back in 2021 when I had earned an 8.7% gain, and lost 69% in 2022 when I had lost 23.6%. So, I feel pretty good about ending 2022 with not too bad of a loss relatively speaking.

Things have been very different in 2023 so far and – although I had an entire year of downs and ups and downs throughout 2022 – I have gained 36% this year in just a little over 4 weeks! That’s about a 5-year gain in just over 4 weeks time! So, I’ve recovered all of my losses from last year (and then some). I always tell people that it makes sense to stay invested and to continue buying into downturns – even when things go badly – because when it turns… it turns. And you want to be fully invested to the extent possible when that happens.

I’ve done so well this year that I am now in the mode of “selling every gain.” So, every time my overall portfolio experiences additional gains, I actively look for more stocks to sell. I’m about 50% invested right now so I am finally becoming more of a lower risk investor much to my relief.

I was a high risk investor throughout 2022 (much to my dismay). I moved from being a low risk investor (back in 2021 – which is the level of risk I am supposed to be at given my financial circumstances) to a high risk investor throughout 2022. That was never supposed to happen. However, I am very much relieved that I still have the ability to “fight it out” and survive as a high risk investor. Needless to say, I will be making additional changes to tighten my techniques so that I don’t become as much of a high risk investor in the future.

I’m happy that I had the foresight to continue modifying my investment strategies. It really has paid off. This is something you always want to get into the practice of doing. Observe what happens and make adjustments to your investment strategies so that you can work towards improving your investment performance over time in accordance with your risk profile. I happen to presently be a low risk investor (although throughout 2022 I was temporarily high risk) but many of you will probably be higher risk investors. So, your investment strategies will probably need to be a bit more aggressive than mine.

You can be a very successful investor if you effectively use all of the tools and techniques available to maximize your investment returns. It’s been an interesting investing experiment I’ve been running so far for 2022-2023. We’ll see how things go in the future.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/)

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow.

Happy investing everyone!

#finance #stocks #investing #stockmarket #success

IT’S A GOOD TIME TO BUY FOR LONGER TERM INVESTORS

Posted on by Joseph M. Brennan Jr.

The IWM ETF (which tracks the Russell 2000 index) has dropped about 40% from its previous high. So, it looks like a pretty good time to buy for longer term investors. The IWM (and the Russell 2000 for that matter) might drop even more if we actually experience a recession (this index usually falls first and the hardest during recessions but is generally the first and the fastest to recover).

Regardless of whether we experience a recession or not, the IWM (and Russell 2000) is likely to recover its previous high within 3 years or so. If you’re thinking a 40% gain in 3 years sounds pretty good, then do your math again. Because it would be more like a 67% gain which is very substantial. Even if the IWM took 10 years to get back to even (which would be a very rare occurrence), that would be a 6.7% gain every year which is a pretty decent gain.

If you like technology stocks then the QQQ, which tracks the Nasdaq, has also dropped about 40% from its previous high which means it will also experience about a 67% gain once it gets back to its previous high.

Another thing you can do is split money between IWM and QQQ if that is your preference or buy over several days, weeks, or months. The only problem with that might be when they recover they generally rise sharply so you might miss out on some of the early gains if that happens.

You’re Welcome.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/)

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow.

Happy investing everyone!

#finance #stocks #investing #stockmarket #success

HOW TO LOSE YOUR SHIRT IN THE STOCK MARKET WITHOUT LOSING YOUR SHORTS TOO (PART THREE)!

Posted on by Joseph M. Brennan Jr.

It’s always a good idea to adjust your investment strategies over time. Those of you who have been following me closely know that I’ve had a real “knack” over the past 9 months or so for picking losing stocks. However, I have generally refused to let them go and have continued buying into them as the buy signals get stronger with every drop, and they became more and more attractive, with respect to all of the indicators I use to make investment decisions. And, as usual, I generally refuse to sell on “buy” signals and frequently do the opposite. I wrote about this back in March and April and didn’t realize at the time that this would become a multi-part series but I suppose that is how things are playing out for this year. Because, here it is months later and I am still fighting the downs and ups and downs of what has been a highly volatile stock market this year (most of which have been downs).

The fight continues but it appears some of the strategies I’m using are actually helping. The new strategy I am employing involves rotating out of the stocks which appear to be less favorable in nature and buying into new stocks which appear to be highly favorable in nature – even when the stocks I’m selling are carrying heavy losses. Now, many people might question such a move and be inclined to just hold the stocks long enough for a gain to be realized. However, the tax loss harvesting strategy I wrote about previously and the fact that I would stand to have an effective “gain” of about 24% based on my current tax bracket by selling these more unfavorable stocks (even if no further gains were realized in my portfolio) combined with the potential for much stronger gains by switching to much more favorable stocks, then the potential gains from here might be pretty substantial.

Is there any guarantee that the above strategy will work? Of course not. Investing is primarily about making decisions based on various indicators, the associated likelihoods, and employing effective strategies accordingly. So, at best you can position yourself for a potential favorable return, but there is never a guarantee.

I’m presently still a high risk investor (much to my dismay), but not nearly as extreme as I was back in March and April. As a result of all the buying I have done, I have moved from being a low risk investor (back in 2021) to a high risk investor. The low point for me so far this year was when I was 142% invested (yes – I was using margin) and down 41.19% for 2022 (and down 44% since September/October 2021). Presently, I am 97% invested and down 30.62% for 2022 (and down 33% since September/October 2021).

I haven’t been overly concerned with having a negative return for 2022 because all of the major stock market indexes are getting hammered this year so far (the recent lows being a 24% loss for the S&P 500 Index, a 34% loss for the NASDAQ, and a 28% loss for the Russell 2000) and even the ultimate, safe haven, low risk investment (the bond market) has gotten hammered with a highly unusual 11% loss. Eventually, the market indexes will recover and so will most of the stocks I’m holding. I would be more concerned if I was experiencing substantial losses while the major market indexes were showing significant gains.

You can read about the buy and sell strategies I’ve been using in Part One and Part Two of this series. I am mostly using the same strategies throughout the rises and falls in stock prices no matter what the cycles might turn out to be. If the stocks are dropping, I’m tending to buy more. And if they are rising, I’m tending to sell more. The only exception is the new strategy I’m currently employing where I am taking realized losses and rotating out of less favorable stocks and buying into more favorable ones.

I’m happy I’ve been modifying my investment strategies. It seems to be paying off. This is something you always want to get into the practice of doing. Observe what happens and make adjustments to your investment strategies so that you can work towards improving your investment performance over time in accordance with your risk profile. I happen to presently be a low risk investor (although right now I am temporarily high risk) but many of you will probably be higher risk investors. So, your investment strategies will probably be a bit more aggressive than mine.

You can be a very successful investor if you effectively use all of the tools and techniques available to maximize your investment returns. It’s been an interesting investing experiment I’ve been running so far for 2022. We’ll see how things go.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/)

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow.

Happy investing everyone!

#finance #stocks #investing #stockmarket #success

HOW TO LOSE YOUR SHIRT IN THE STOCK MARKET WITHOUT LOSING YOUR SHORTS TOO (PART TWO)!

Posted on by Joseph M. Brennan Jr.

It’s always a good idea to adjust your investment strategies over time. Those of you who have been following me closely know that I’ve had a real “knack” over the past 7 months or so for picking losing stocks. However, I refuse to let them go. And I continue buying into them because the buy signals keep getting stronger and stronger with every drop, and they became more and more attractive, with respect to all of the indicators I use to make investment decisions. And, as usual, I refuse to sell on “buy” signals and frequently do the opposite. I wrote about this back in March and didn’t realize at the time that this would become a multi-part series but I suppose that is how things are playing out. Because, here it is a month and a half later and I am still fighting the downs and ups and downs of what has been a highly volatile stock market this year (most of which have been downs).

The fight continues but it appears some of the strategies I’m using are actually helping. I’m still presently a high risk investor (much to my dismay), but not nearly as extreme as I was back in March. As a result of all the buying I have done, I moved from being a low risk investor to a high risk investor. The low point for me so far this year was 14 March when I was 140% invested (yes – I was using margin) and down 30.34% for 2022 (and down 34% since September/October 2021). Presently, I am 92% invested and down 20.65% for 2022 (and down 24% since September/October 2021). Although, the present 21% loss I am experiencing is substantial, it comes as each of the major indexes have either retested (in the case of the S&P 500 and the NASDAQ) or closed below their March lows (in the case of the Russell 2000 index). The last time the major indexes experienced these lows (back in March) my losses were far greater than they are right now. So, things are improving and moving in a positive direction.

I haven’t been overly concerned with having a negative return for 2022 because all of the major stock market indexes are getting hammered this year so far (the recent lows being a 13% loss for the S&P 500 Index, a 20% loss for the NASDAQ, and a 16% loss for the Russell 2000) and even the ultimate, safe haven, low risk investment (the bond market) has gotten hammered with a highly unusual 8% loss. Eventually, the market indexes will recover and so will most of the stocks I’m holding. I would be more concerned if I was experiencing substantial losses while the major market indexes were showing significant gains.

You can read about the buy and sell strategies I’ve been using in Part One of this series. I am using the same strategies throughout the rises and falls in stock prices no matter what the cycles might turn out to be. If the stocks are dropping, I’m buying more. And if they are rising, I’m selling more. I continue the process until I get to the point where I am either “all in” (including margin – at least for now) or exit the positions completely.

I’m happy I’ve been modifying my investment strategies. It really seems to be paying off. This is something you always want to get into the practice of doing. Observe what happens and make adjustments to your investment strategies so that you can work towards improving your investment performance over time in accordance with your risk profile. I happen to presently be a low risk investor (although right now I am temporarily high risk) but many of you will probably be higher risk investors. So, your investment strategies will probably be a bit more aggressive than mine.

You can be a very successful investor if you effectively use all of the tools and techniques available to maximize your investment returns. It’s been an interesting investing experiment I’ve been running so far for 2022. We’ll see how things go.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/)

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow.

Happy investing everyone!

#finance #stocks #investing #stockmarket #success

HOW TO LOSE YOUR SHIRT IN THE STOCK MARKET WITHOUT LOSING YOUR SHORTS TOO (PART ONE)!

Posted on by Joseph M. Brennan Jr.

It’s always a good idea to adjust your investment strategies over time. Those of you who have been following me closely know that I’ve had a real “knack” over the past 6 months for picking losing stocks. However, I refuse to let them go. And I continue buying into them because the buy signals keep getting stronger and stronger with every drop, and they became more and more attractive, with respect to all of the indicators I use to make investment decisions. And, as is usual, I refuse to sell on “buy” signals and frequently do the opposite.

As a result of all the buying I have done, I moved from being a low risk investor to an extremely high risk investor. This can happen from time-to-time and as long as I don’t remain a high risk investor for a long period of time, then that’s probably okay. I haven’t been too concerned because I’ve liked the patient approach I’d been using. And, frequently, losing stocks become leading stocks over time and stocks that continually get clobbered usually experience very strong reversals. So, I keep buying into them.

The low point for me so far this year was Monday (4 days ago – 14 March). I was 140% invested (yes – I was using margin) and down 30.34% for 2022 (and down 34% since September/October 2021). Ordinarily, as a low-risk investor I would rarely be anywhere close to 100% invested in the stock market (much less over-invested). But I was not willing to go down without a fight. And so far it has paid off handsomely. As of today, I am down 9.31% for the year and am 106% invested. So, that’s a huge, 21 percentage point gain in only 4 days. So, I’m very happy about this relatively speaking. It feels like victory even if it’s truly not in terms of me not earning any positive returns so far in 2022.

I haven’t been overly concerned with having a negative return for 2022 because all of the major stock market indexes are getting hammered this year so far (the recent lows being a 13% loss for the S&P 500 Index, a 20% loss for the NASDAQ, and a 14% loss for the Russell 2000). And eventually the market indexes will recover and so will most of the stocks I’m holding. I would be more concerned if I was experiencing substantial losses while the major market indexes were showing significant gains.

Now, a couple of years ago, I would have been “all in” several months ago and have been two or three times more negative using the strategies I had detailed in my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books (https://brighterdayslifecoaching.com/published-books…/). And these might still be very good strategies to use for higher risk investors. But for low risk investors, they may not be. So, I’m very thankful that I modified my approaches quite a bit since then so that I have a chance to experience shallower losses (relatively speaking) and recover from these.

The approach I’m presently using to buy into falling stocks is the following:

  1. If the initial position of a stock I bought drops 10%, and the stock still looks attractive based on the indicators I use to make investment decisions, then I buy 10% more shares than I did the first time (e.g., if I bought 100 shares the first time, then the second time I buy 110 shares: 1.10 x 100 = 110).
  2. If the stock drops another 10%, and the stock still looks attractive based on the indicators I use to make investment decisions, then I buy 10% more shares than I did the second time (e.g., 121 shares: 1.10 x 110 = 121).
  3. I continue this process with every drop.

The approach I am presently using to sell the gains is the following:

  1. I determine what a reasonable gain might be for the stock from the current depressed levels it is trading at (20%? 25%?). If the stock gains that amount from the lowest price I paid, then I sell that set of shares (e.g., if the stock rebounds strongly after the second buy of 121 shares in the above example, then I will go ahead and sell the 121 shares if the gain is substantial enough).
  2. I determine what a reasonable gain might be for the stock from the current level it is trading at after selling the first lot of shares (10%? 15%?). If the stock gains that amount from the most recent sell price, then I sell that next set of shares (e.g., if the stock gains the amount I’m targeting beyond the price I sold the 121 shares for in the above example, then I will go ahead and sell the 100 shares I bought the first time).

So, I am currently using the above process throughout the rises and falls in the stock price no matter what the cycles might turn out to be. If the stock is dropping, I’m buying more. And if it is rising, I’m selling more. I continue the process until I get to the point where I am either “all in” (including margin – at least for now) or exit the position completely.

The above strategy has really worked out well so far. Using my previous strategy, I would have been a much more aggressive buyer on the drops which would have led to much deeper losses and a much longer recovery time.

I’m happy that I modified my investment strategy back in September/October 2021. And this something you always want to get into the practice of doing. Observe what happens and make adjustments to your investment strategies so that you can work towards improving your investment performance over time in accordance with your risk profile. I happen to presently be a low risk investor (although right now I am temporarily high risk) but many of you will probably be higher risk investors. So, your investment strategies will probably be a bit more aggressive than mine.

Another thing I am doing in 2022 to maximize my investment returns is performing tax loss harvesting strategies to offset my realized gains and minimize my tax burden. This essentially, involves selling some of your losses to offset your gains. You can read all about my tax loss harvesting strategies here: https://brighterdayslifecoaching.com/maximize-stock-market-returns-by-performing-tax-loss-harvesting-to-minimize-tax-burden/

To the extent possible, what I plan to do in 2022 to maximize my investment returns will be to hold off on selling until the individual lots of the stocks I purchased passes the one year mark. I rarely do this because I tend to take substantial gains as they happen (and I might continue this practice if the gains are compelling enough). However, if I am successful in waiting a year before selling gains, then I’ll only have to pay 15% taxes on those gains instead of my typical 24% tax bracket. So, the tax incentive is huge for waiting on selling your gains if you have that kind of patience. Often, I don’t. But we’ll see what happens. I know I’ll have to do some additional selling soon since I’m presently 106% invested which is much too high for a low risk investor. But I’ll probably get there eventually.

You can be a very successful investor if you effectively use all of the tools and techniques available to maximize your investment returns. It’s been an interesting investing experiment I’ve been running so far for 2022. We’ll see how things go.

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/)

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow.

Happy investing everyone!

#finance #stocks #investing #stockmarket #success #taxes