Why Smart Investors Will Let Twitter’s IPO Fly Away

Twitter's IPO

Twitter just priced its initial public offering (IPO) at $26 per share. At that price, the company is worth $18 billion, at least on paper. The offering will undoubtedly spark tremendous excitement and news, not to mention a tweet or two. But is the stock a wise investment? The answer is unquestionably no. Here’s why. […]

Published or Updated: November 6, 2013

Vanguard Managed Payout Fund–A Simplified Strategy for Retirement Income


Simpler is better. Wouldn’t it be great if retirees could invest in a single mutual fund that (1) invested their nest egg wisely, and (2) automatically distributed retirement income each month? Enter the Vanguard Managed Payout Fund. A reader named Paul alerted me to this option the other day. It turns out that Vanguard had […]

Published or Updated: October 28, 2013

How to Respond to a Stock Market Crash

stock market crash

Today is the 26th anniversary of the 1987 stock market crash. On that day, the market plunged more than 22 percent. While the ’87 crash is a distant memory, it serves as a good reminder that the market doesn’t always go up. More importantly, how prepared are we to handle a market crash? I can […]

Published or Updated: October 28, 2013

Using the Current and Quick Ratios to Evaluate the Health of a Company

Apple Current and Quick Ratios

The very first thing that I do when evaluating a stock is to examine its balance sheet. The balance sheet tells you just how safe and sound a company is. Does it have a lot of debt? Does it have plenty of cash to weather a downturn in the economy? Looking at just the numbers, […]

Published or Updated: August 19, 2013

Making the Most of Morningstar: Determining the Market Cap of a Portfolio

Morningstar Style Map

This article is part of our Morningstar User’s Guide, a series of articles discussing how to make the best use of the tools, research and analysis available at Morningstar.com. In the series on asset allocation, we looked at the importance of the market capitalization (or market cap, for short) of a fund or portfolio. Today, […]

Published or Updated: August 1, 2013

5 Free Simulated Stock Trading Tools

tradeMonster Simulated Stock Trading

Last week I was talking to a group of college students and recent college graduates. The topic was investing. “Has anyone here every invested in the stock market,” I asked. Nope. “Can anybody name a single mutual fund company?” Nope. But it was the answer to the last question I asked that made me laugh. […]

Published or Updated: June 24, 2013

5 Advantages of ETFs over Mutual Funds

Advantages of ETFs

When I first started investing in 1993, Exchange Traded Funds (ETFs) had just been introduced. They were not, however, a popular or widely known option. Instead, my options were primarily mutual funds or individual stocks. When ETFs were first introduced, they seemed pointless to me. We were told they were a cross between mutual funds […]

Published or Updated: June 10, 2013

Why Tesla Stock Should Not Electrify You


As I write this, shares of Tesla Motors Inc. (NASDAQ:TSLA) are on a tear. Up over 20% on news of its first quarter results, the market is doing what the market does–go crazy. I spent all of about 60 seconds looking at Tesla’s 2012 year end financial statements and its first quarter 2013 results. That’s […]

Published or Updated: May 9, 2013

Pros and Cons of Hiring an Investment Specialist


I‘ve been investing in the stock market for more than 20 years. During that time I’ve never hired an investment adviser to manage my portfolio. The primary reason is cost. A close second reason is that I enjoy investing. But if I’ve learned one thing from running this website it’s that how I handle my […]

Published or Updated: May 7, 2013