No matter what you invest in, discipline and patience are key attributes to success. They are critical to us as we seek to buy companies that we believe to be undervalued. The first benefit of buying undervalued stocks is these investments should produce terrific returns over the long run.
This year’s stock market has continued where it left off last year and the year before that and the five years before that… straight up (with a minor correction here and there). This year’s version has registered an 8% return (as measured by the S&P 500 Index) as of June 30th. That’s right, for seven plus years the stock market has finished with a positive return.
The tax code, with all of its hundreds of pages of regulations, stipulations, and loopholes always leave something be learned. Not only is the U.S. Internal Revenue Code massive, different write-offs and deductions occur at different stages in life, so it’s unsurprising if you don’t know the details of the IRA (Individual Retirement Account) charitable rollover.
As the saying goes there are two things that are inevitable: death and taxes. And, out of those two sure things, you can only really plan for your taxes. It should be no surprise when tax season surely and steadily rolls around again, yet every year there are plenty of individuals who file for a tax extension (in 2014 there were approximately 12 million Americans who did so).
In the realm of financial planning, time is our most valuable asset. It’s available to all of us, providing each individual with the same opportunity to optimize its value in building wealth. It’s the only resource we all have over which we have some degree of control.
Here’s a thought: retirement doesn’t mean the end. It doesn’t mean an end of self-importance or purpose, it just means a new chapter—a paradigm shift of what life is beyond long days and meetings and bosses. Unless you own your own business, and even then, you are not your business.
One type of company that seems to get overlooked by many investors, is the small to mid-sized firm (as measured by market capitalization) that provides a needed service and has done so for a very long time. Chemed Corp (CHE) falls into this category… which, by the way, is completely fine with us.
Bear Markets are Healthy for Long Term Returns
We submit that the only thing about bear markets that should matter to investors is how they react to them. First, on one should be surprised when a bear market occurs. They happen with some regularity.
It has only been since the Baby Boomer generation began to cross the retirement threshold that we’ve had to seriously confront the new challenge of our longevity.