5 Great Investing Quotes

A little inspiration goes a long way, so we dug up a few of our favorite investing quotes to get your investing juices flowing for the year ahead.
 

1. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

- Warren Buffett
 

2. “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”

- Robert Kiyosaki
 

3. “You have to learn that there’s a company behind every stock and there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.”

– Peter Lynch
 


4. “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

-Paul Samuelson
 

5. “The four most dangerous words in investing are: ‘this time it’s different.’”

- Sir John Templeton
 

And one bonus quote just for the fun of it:
 

“If I’d only followed CNBC’s advice, I’d have a million dollars today. Provided I’d started with a hundred million dollars.”

- Jon Stewart

 
Images via tornatore, Robin Stott

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Don’t Let Anchors Drag You Down

Here at GoalMine, we are devotees of value investing, the philosophy that one should seek out investments that are trading for less than their intrinsic value. Basically, value investing argues that eventually, “truth will out”, and the true value of an investment will be reflected in its stock price and/or dividends paid. It’s a philosophy that requires patience and a willingness to stick through the tough times, as this price adjustment can sometimes take a while in coming.

“But shouldn’t the markets already take all available information into account?”, you ask, “Shouldn’t they prevent any investment from trading at an incorrect price for any reasonable length of time?” Believe me, I’ve asked that same question. The problem is that pricing an asset is effectively an exercise in predicting the future–and nobody is all that good at predicting the future.

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Jargon Buster: FDIC

FDIC stands for Federal Deposit Insurance Corporation. The FDIC, a US government organization, was created in 1933 in response to the Great Depression, and was designed to help create a more stable banking system. The purpose of the organization is to provide insurance protection to depositors in the case of a bank failure. Banks pay into the insurance fund to cover losses when they arise.

Deposits at many banks are FDIC insured. This means that, up to the legal limit (currently $250,000 per depositor per institution), your money is rock solid safe. If a bank should fail, the FDIC, backed by the US government, will ensure that you get your deposits. Mutual Funds and other securities, however, are not bank deposits and are therefore not insured by the FDIC.

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Spend Money on the Things You Value

New Year’s resolutions were on my mind this morning as I read a recent poll about what Americans are willing to give up in order to save money. According to the results, most people were willing to give up things like coffee, eating out, and cable. But there were a couple things people were NOT willing to part with: 53% wouldn’t give up their cell phones, and 32% wouldn’t give up Internet access.

Researchers seemed surprised these numbers were so high, but it makes a lot of sense to me. After all, people rely on their cell phones and the Internet for all sorts of things (in my case, perhaps to an unhealthy degree!), so of course they’re willing to keep spending money on them. And frankly, I don’t think that’s a bad thing.
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Sticking to Your New Year’s Resolutions

Yep–it’s that time of year again. You’ve probably read several financial New Year’s resolutions and maybe even have your own list going in your mind at this point. So rather than add to the cacophony of promises you are making to yourself right now we thought we’d share a few interesting ideas that could help you actually stick to some of those lofty goals you are setting. Here are a few of our favorites:
 

1. Visualize Your Gray Hairs Now

A recent study in the Journal of Marketing Research bears the academic title, “Increasing Saving Behavior through Age-Progressed Renderings of the Future Self”. It basically suggests that if you picture yourself at retirement age, you will better be able to identify with your future self and, as a result, you will be more likely to make sacrifices today for the octogenarian you will become.

Need a little help imagining what you will look like? Check out the Face Transformer at the University of St. Andrews website which will let you upload a photo of youself and transform it into an old person. Then keep the photo next to your desk to remember to put a little money aside for those golden years.
 
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Did you get a gift card you don’t want? Invest it!

Now that this gift-giving season is coming to a close, you may find yourself with various gift cards on hand.

If you’re not sure what to do with them, why not deposit the cash into your GoalMine account? Until the end of January, we’re letting you trade in your gift cards for cash. In fact, if you’re a new customer, we’ll even pay you 150% of the face value of your first card. Read more about it, or check it out directly!

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Should Auld Investments Be Forgot?

fireworksWith New Year’s just around the corner, you may be considering changes you’d like to make in 2012. But what about spending a few minutes thinking about those things you’d like not to change? Here are three financial habits that we’re definitely not changing in 2012:

1. Pick and stick

We’re big believers in the power of compounding returns. But to reap them, you have to get in the game and stay in the game. This is especially true if you, like us, buy into the idea of “value investing”–that is, picking businesses that are trading below their long-term value. To do well with value investing, it’s important to be patient. If you pick a good investment, and stick with it, you’ll be in good shape over the long term. Getting in and out all the time is a very risky proposition, and generally a bad idea for most investors.

As a grade-schooler, I learned a little song that said, “Make new friends, but keep the old: one is silver and the other gold.” I’m not suggesting you buy precious metals (or that you don’t–that’s up to you), but it is worth remembering that there is no reason to jump ship on an investment just because you’ve been holding it for a while.

2. Do it, then do it again, then again and again

Consistency is one of the traits of successful investors. In fact, creating and adhering to an investment plan is one of the best ways to make money over time. Putting money into your investments on a regular schedule–on the same day every month, for example–helps produce the financial discipline necessary to build a substantial portfolio. Furthermore, it allows you to take advantage of dollar cost averaging.

3. Keep learning

There is always more to learn about investing. Not all of the information out there is helpful, or even accurate, but there are many good resources available. We’ve recommended some strong investing blogs before, and have also provided a list of some excellent investing inforgraphics that can provide perspective on market performance and other elements of investing. And, of course, we’d love you to go through the basics of investing with our own Investing U articles.

We hope that the coming year brings you much happiness and success, in investing as in the rest of your life.

Image via mrhayata

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Jargon Buster: IPO

The acronym “IPO” stands for “initial public offering”. An initial public offering is the first time that a private company offers its shares for sale to the public. Companies do this to raise money.

Usually, when you buy shares of a company, you are buying them from other people, not directly from the company. However, in the case of an IPO, the company is the seller of the shares.

IPOs tend to generate a lot of attention from the financial press and other media. This is because many IPOs mark a sort of rite of passage for exciting, growing companies. It is a way for companies to grow more quickly, and it gives individual investors the chance to take advantage of companies that are doing new and different things.

In general, shares in an IPO are priced to meet two objectives: generate money for the company, and allow those who buy the shares at the IPO price to make some money on the first day of trading. If the IPO price is too low and prices rise substantially on the first day of trading, it means that the company left money on the table. But if the IPO price is too high and shares fall or remain stagnant on the first day of trading, many people will flee from the stock, which could hurt the company’s ability to raise money later.

Finally, it’s worth noting that most companies that have an IPO also sell stock again later–it’s rarely a one-and-done kind of thing.

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5 Elements of Successful Financial Goals

penThe period between Thanksgiving and New Year’s Day is traditionally the time when people reflect on the year that is drawing to a close and make resolutions about what they’ll do differently in the year ahead. Although I can’t claim to have completed every resolution I’ve made, I can say that the process of setting real, measureable goals is always beneficial for me. And here at GoalMine, we’re definitely believers in the power of setting specific, acheivable financial goals; heck, it’s right in our name! Here are 5 steps to making and keeping financial goals this holiday season.
 
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Jargon Buster: Dollar Cost Averaging

Dollar Cost AveragingSo you’ve decided you are ready to invest. You’re tired of just squirreling your hard-earned money under the mattress or making next to nothing in a savings account. But there’s something about putting a whole bunch of your money into that investment all at one time that just feels a bit…well, scary. In this case, that gut feeling of concern could be justified.

You may have already heard of dollar cost averaging. As usual, the investing experts have managed to come up with a spectacularly long and confusing name for a really simple concept. Dollar-cost averaging means that instead of investing all your money at one time you put it in a little bit at a time. So, for example, instead of waiting to put together $1,200 and then investing it all at once, you would put in $100 a month for 12 months.
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