Tag: method

Featured stock of the week: Applied Materials

Despite the recent drop following Q1 2018 #earnings, Applied Materials, $AMAT, still looks like an attractive investment idea.

The reported earnings show very good growth in both the top and the bottom line, however the analysts were put off by the guidance provided during the conference call.

From a valuation point of view, the stock still looks cheap with a PEG ratio (5 years expected) well below unity as you can appreciate from Yahoo Finance.

Now that the stock is trading below the 200 days moving area it may be a good idea to see whether and how this sudden drop is temporary or the start of a downtrend prior to initiating any position or accumulating.

Stock picking inspirations from a long-term investor and a best practice

When to start investing responsibly ?

As long as you have assets to invest, the answer is: “immediately !”

When it comes to investing, there are three key factors, as I see it:

  1. Only invest what you can afford;
  2. Give yourself a method to invest;
  3. Follow that method or, in other words, be disciplined.

More on these factors in due course..

It is very important to realize that if you are after short-term gains, you will probably be disappointed by the actual returns of your investments, where they are governed by self-made strategies or they follow professional advice. I always like to consider investing my assets as a long term exercise: rather than worrying about the next 10, 100 or 1.000 days, I think about the next 10.000 days, which is about a 30-year time span.

One of the most powerful advantages of being a long-term investor is the effect of compounding , something that we will talk about more in detail soon: the longer you reap the benefits of your investments and re-invest them in a strategic as well as disciplined way, the more compounding amplifies your total returns. Precisely for this reason, there is no advantage in deferring the investment of your assets.

Now that we have talked about why, how and when to invest, I look forward to my next post in which I will provide some advice on some of options out there for investing your cash.