The Rant: Alpha Teach Yourself Investing in 24 Hours: An Analysis (part 50)

Mission Statement

Sunday, January 7, 2018

Alpha Teach Yourself Investing in 24 Hours: An Analysis (part 50)

Active Investing (part A)

Charles Lamson

Active investors are not day traders or speculators. They may hold a position in an investment for several years. Their goal is not to churn their portfolio, but to continually fine-tune it, looking for a better-than-average return. As a group, they may have greater resources to work with than the average investor and a willingness to work harder.

Disadvantages of Active Investing

The following is a list of the disadvantages of active investing:

It requires a lot of time and energy.
It can be slightly more risky than average investing strategies.
It can lead to addictive investing.
It can run up big commissions and fees.
It can create tax problems.

Time and Energy

You should plan to spend a couple hours per week on your investments if you want to actively manage your portfolio. This time will include keeping up-to-date on market activity, your investments, and general business and economic news.

The good news: There is plenty to work with in terms of news and information. I cannot stress enough how helpful the Internet will be in doing your homework. You will be able to access news and information on your investments with amazing speed and ease.

For example, you can configure many of the news sites to collect information on industries, or particular companies you are interested in following. Many sites will let you build your portfolio online and will update it during the day, and it is all free.

You can do the same thing using print-media, but you have to do all the work of collecting prices. You will spend a lot more time and not have access to a fraction of the information and opinions available online.

Slightly More Risky

The active investor aims higher than the conservative investor, which means he or she is willing to push the risk factor a little bit harder. The active investor may hold positions for shorter periods.

PROCEED WITH CAUTION

Active traders may tend to get over confident and short cut established investment decision making. For some traders, the only cure is the harsh slap in the face of a really bad investment. You do not have a special gift for picking stocks. Even the most seasoned investors will make mistakes. Learn from your mistakes.

Active investors are often not as diversified in their holdings as more conservative investors. This leaves them more vulnerable to market fluctuations. Focused investments can lead to big gains, but are also open to significant losses without close attention.

Addictive Investing

Addictive investing is when the investor's focus shifts from building a portfolio to the excitement of trading. These folks often begin investing with perfectly legitimate reasons, but get caught up in the whirl of the daily market. The same thing happens to some people who visit Las Vegas for the first time. The excitement gets the better of them.

Big Commissions and Fees

The more you trade, the larger fees and commissions you generate. It is easy to forget about seemingly small sums, but they will eat a big hole in your profits and make your losses even worse.

JUST A MINUTE

Online brokers offer the most inexpensive commissions (check out Gomez.com for the best rates), but you may not be comfortable working in an online environment. You do not have to use an online broker to be an active trader.

Choose a discount broker with your anticipated trading volume in mind. Some brokers will give even greater discounts for frequent traders.

Tax Problems

Unless you are trading inside a tax-deferred retirement account, you generate a taxable event every time you sell an investment for a profit.

Taxes on the sale of an asset held less than one year can be significant if you are in a high-income tax bracket. Whenever possible, hold assets for at least one year and one day to qualify for the long-term capital gains tax. Also be aware that your state revenue department may want a piece of your profits if you live in a state with an income tax.

It is important to keep detailed records of your transactions. Do not rely solely on your broker to keep track of everything.

Know what you are getting into before you start a program of active investing. Be honest with yourself about your commitment to stick with such a program.

*SOURCE: ALPHA TEACH YOURSELF INVESTING IN 24 HOURS, 2000, KEN LITTLE, PGS. 318-320^

END

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The kingdom of God is among you

Luke 17:20-25 Asked by the Pharisees when the kingdom of God was to come, Jesus gave them this answer, ‘The coming of the kingdom of God does not admit of observation and there will be no one to say, “Look here! Look there!” For, you must know, the kingdom of God is among you.’ He said to the disciples, ‘A time will come when you will long to see one of the days of the Son of Man and will not see it. They will say to you, “Look there!” or, “Look here!” Make no move; do not set off in pursuit; for as the lightning flashing from one part of heaven lights up the other, so will be the Son of Man when his day comes. But first he must suffer grievously and be rejected by this generation.’

Live Adoration from Tyburn Convent

Adoration, also known as Eucharistic Adoration, is a Catholic prayer in front of the Blessed Sacrament. It is a sign of devotion and worship to Jesus Christ, who is believed to be present in the consecrated host. During adoration, Catholics pray to Jesus Christ before the Eucharist at their local parish. The Eucharist is typically kept in a tabernacle at the parish church, and may be presented in front of a closed tabernacle or in front of the exposed host in a monstrance. A monstrance is a vessel used in Roman Catholic, Anglican, High Church Lutheran, and Old Catholic churches. It is a stand made of precious metal that holds the Blessed Sacrament during adoration. The word "monstrance" comes from Latin and means "to show".

Love

1 Corinthians 13:4-7: Love is always patient and kind; it is never jealous; love is never boastful or conceited; it is never rude or selfish; it does not take offence, and is not resentful. Love takes no pleasure in other people’s sins but delights in the truth; it is always ready to excuse, to trust, to hope, and to endure whatever comes. 1 Corinthians 13:8-9,13: Love does not come to an end. But if there are gifts of prophecy, the time will come when they must fail; or the gift of languages, it will not continue for ever; and knowledge – for this, too, the time will come when it must fail. For our knowledge is imperfect and our prophesying is imperfect. In short, there are three things that last: faith, hope and love; and the greatest of these is love. Colossians 3:14-15: Over all these clothes, to keep them together and complete them, put on love. And may the peace of Christ reign in your hearts, because it is for this that you were called together as parts of one body. Always be thankful.

It is not peace I have come to bring, but a sword

Jesus instructed the Twelve as follows: ‘Do not suppose that I have come to bring peace to the earth: it is not peace I have come to bring, but a sword. For I have come to set a man against his father, a daughter against her mother, a daughter-in-law against her mother-in-law. A man’s enemies will be those of his own household. ‘Anyone who prefers father or mother to me is not worthy of me. Anyone who prefers son or daughter to me is not worthy of me. Anyone who does not take his cross and follow in my footsteps is not worthy of me. Anyone who finds his life will lose it; anyone who loses his life for my sake will find it. ‘Anyone who welcomes you welcomes me; and those who welcome me welcome the one who sent me. ‘Anyone who welcomes a prophet will have a prophet’s reward; and anyone who welcomes a holy man will have a holy man’s reward. ‘If anyone gives so much as a cup of cold water to one of these little ones because he is a disciple, then I tell you solemnly, he will most certainly not lose his reward.’ When Jesus had finished instructing his twelve disciples he moved on from there to teach and preach in their towns.

The beheading of John the Baptist

Matthew 14:1-12 Herod the tetrarch heard about the reputation of Jesus, and said to his court, ‘This is John the Baptist himself; he has risen from the dead, and that is why miraculous powers are at work in him.’ Now it was Herod who had arrested John, chained him up and put him in prison because of Herodias, his brother Philip’s wife. For John had told him, ‘It is against the Law for you to have her.’ He had wanted to kill him but was afraid of the people, who regarded John as a prophet. Then, during the celebrations for Herod’s birthday, the daughter of Herodias danced before the company, and so delighted Herod that he promised on oath to give her anything she asked. Prompted by her mother she said, ‘Give me John the Baptist’s head, here, on a dish.’ The king was distressed but, thinking of the oaths he had sworn and of his guests, he ordered it to be given her, and sent and had John beheaded in the prison. The head was brought in on a dish and given to the girl, who took it to her mother. John’s disciples came and took the body and buried it; then they went off to tell Jesus.

Psalms 9:16

The LORD is known by the judgment which he executeth: the wicked is snared in the work of his own hands. Higgaion. Selah - Question: What does Higgaion and Selah mean? Answer: Both Higgaion and Selah are used numerous times in the Old Testament. They occur together in Psalm 9:16. The meanings of these words are uncertain. We observe Higgaion in such passages as Psalm 9:16; 19:14; 42:3; Lamentations 3:63. In Arabic, the root gives a deep vibrating sound, like the murmering sound of a harp (Psa. 92:3). The International Standard Bible Encyclopedia states that it may be derived from the Greek versions of Psalm 9:16 and takes it to mean an instrumental interlude. It may also mean a soliloquy or meditation such as concerning the judgment of God (Psa. 9:16), the words and work of God (Psa. 19:14), and the loving kindness and faithfulness of God (Psa. 92:2-3). In the Septuagint, Selah is translated as daplasma (meaning a division). It occurs in Habakkuk 3:3, 9, 13 and 71 times in the Psalms. It is used in 39 of our 150 psalms. Of those 39 psalms, 31 they are ones handed over to "the chief Musician." So, pause and meditation may be the predominate idea. In addition, it may mean to lift up (Hebrew, salal) or, in some definitions, a repetition, end of a strophe, or a recurring symphony. In his sermon named "HIGGAION!" about Psalm 9:16, Archibald G. Brown, on August 17, 1873, at the East London Tabernacle said this: "When the psalmist wrote this verse, and reached the words 'The wicked shall be snared in the work of his own hands', he seemed to be overpowered at the terror of the thought, and so put a full stop and wrote in the word 'Higgaion!' As much as to say, 'O my soul, meditate on the tremendous truth my hand has penned, and let all who read the same meditate.' And then after 'Higgaion' he puts 'Selah'. He would have there to be a solemn pause. Oh, I would that there could be just one moment's solemn pause in our meeting tonight. Would that there could be a Selah, a Higgaion! Friends, shall there be? I put it to you. 'The Lord is known by the judgment which he executes; and the wicked shall be snared in the work of his own hands!" Now let us just for a moment meditate on that. Let there be a solemn Higgaion, and let every heart ask itself the question, 'How do I stand in reference to this tremendous truth?' *Answer by Dr. Joseph R. Nally, Jr. (https://thirdmill.org/answers/answer.asp/file/47892)*

The Rant

Mission Statement

Sunday, January 7, 2018

Alpha Teach Yourself Investing in 24 Hours: An Analysis (part 50)

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