Investing: the Tortoise or the Hare approach?
By Mark Wylie
()
About this ebook
Investing: the Tortoise or the Hare approach? is a practical guide that builds on Mark Wylie’s first three successful books about long-term investing. The author shows how his methods can be successfully implemented by people who don’t have much time or technical knowledge to perform detailed investment reviews and research. Mark examines how to construct a wise portfolio with a margin of safety, including equity indexes, exchange-traded funds (ETFs), property indexes, bond indexes and cash.
Investing: the Tortoise or the Hare approach? includes information on:
• choosing which investments to buy and which to stay away from
• adding index funds, ETFs, listed investment companies and managed funds to your portfolio
• when to buy, hold and sell
• minimising fees and costs
• constructing and maintaining a portfolio
• reviewing your investments
• the causes and effects of booms, busts and debt.
Investing: the Tortoise or the Hare approach? is ideal for those small investors who are looking for an approach that will identify more stable investments that should deliver long-term returns. This approach is also suitable for DIY superannuation investment funds and is particularly effective during times of market pessimism.
About the author
Mark Wylie lives in South Australia. Favouring a fundamental and analytical approach to investment, he has undertaken research into Warren Buffett’s methods. Mark holds a diploma in Financial Advising, and in 2002 launched BPI Wealth Mentors with the objective of helping small investors understand long-term investing and prepare a set of strategies for themselves that would yield profitability and improved returns into the future.
Mark has authored three books about long-term investing. He experienced up close the substantial world market correction of the global financial crisis – the worst since the Great Depression – and now in this book shares the knowledge he has gained about the boom-to-bust cycle.
Mark Wylie
Over more than 15 years of investing, author Mark Wylie has found that under most circumstances his long-term investing approach will produce very good results and will from time to time locate that one company that gives an outstanding performance. Favouring a fundamental and analytical approach to equity investing, he has undertaken extensive research into Warren Buffett’s methods and holds a Diploma in Financial Advising. In 2002 Mark launched Business Perspective Investing with the aim of helping investors understand long-term investing and prepare a personalised strategy that would yield profitability and improved returns into the future. Investing: the Tortoise or the Hare approach? is his fourth book. Mark lives with his family in the Adelaide Hills.
Related to Investing
Related ebooks
Sector Rotation for Future Millionaires: 21 Strategies for Experts and Beginners alike Rating: 3 out of 5 stars3/5The Art & Science Of Preferred Dividend Investing Rating: 4 out of 5 stars4/5The 3 Simple Rules of Investing: Why Everything You've Heard About Investing Is Wrong—and What to Do Instead Rating: 1 out of 5 stars1/5The Investor's Manifesto (Review and Analysis of Bernstein's Book) Rating: 0 out of 5 stars0 ratingsBetter Value Investing: A simple guide to improving your results as a value investor Rating: 5 out of 5 stars5/5The Battle for Investment Survival: Complete and Unabridged Rating: 3 out of 5 stars3/5Comfort Zone Investing: Build Wealth and Sleep Well at Night Rating: 0 out of 5 stars0 ratingsThe Battle for Investment Survival (Rediscovered Books): Complete and Unabridged Rating: 5 out of 5 stars5/5Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere Rating: 4 out of 5 stars4/5Invest like the Best: The Low-Risk Road to High Returns Rating: 0 out of 5 stars0 ratingsDollarlogic: A Six-Day Plan to Achieving Higher Investment Returns by Conquering Risk Rating: 0 out of 5 stars0 ratingsIn Your Best Interest: The Ultimate Guide to the Canadian Bond Market Rating: 5 out of 5 stars5/5Digging into Financial Advice: Finding the Best Help for You to Invest Rating: 0 out of 5 stars0 ratingsSector Trading Strategies Rating: 5 out of 5 stars5/5Simply Invest: Naked Truths to Grow Your Money Rating: 5 out of 5 stars5/5Winning the Loser's Game, Fifth Edition: Timeless Strategies for Successful Investing Rating: 0 out of 5 stars0 ratingsMy Investment Journey: How I failed in stock trading and the lesson learned Rating: 5 out of 5 stars5/5Cognitive Investing: The Key to Making Better Investment Decisions Rating: 0 out of 5 stars0 ratingsThe Investing Oasis: Contrarian Treasure in the Capital Markets Desert Rating: 0 out of 5 stars0 ratingsLow Risk Rules: A Wealth Preservation Manifesto Rating: 0 out of 5 stars0 ratingsNow That You Can Invest Like a Pro Rating: 2 out of 5 stars2/5The Astute Investor, 2nd ed: Moneymaking Stock Market Advice from the Masters Rating: 0 out of 5 stars0 ratingsInvesting for the Long Term Rating: 0 out of 5 stars0 ratingsShort and Simple Guide to Smart Investing Rating: 0 out of 5 stars0 ratings10½ Lessons from Experience: Perspectives on Fund Management Rating: 0 out of 5 stars0 ratingsRisk Parity: How to Invest for All Market Environments Rating: 0 out of 5 stars0 ratingsThe Modern Guide to Stock Market Investing for Teens: How to Ensure a Life of Financial Freedom Through the Power of Investing. Rating: 0 out of 5 stars0 ratingsHow to Swing Trade ETFs Forex Futures and Stocks for Unlimited High Profits Rating: 0 out of 5 stars0 ratingsThe Power of Passive Investing: More Wealth with Less Work Rating: 0 out of 5 stars0 ratings
Investments & Securities For You
The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/5A Beginner's Guide To Day Trading Online 2nd Edition Rating: 4 out of 5 stars4/5Don't Start a Side Hustle!: Work Less, Earn More, and Live Free Rating: 5 out of 5 stars5/5Day Trading For Dummies Rating: 3 out of 5 stars3/5Stock Market Investing for Beginners & Dummies Rating: 5 out of 5 stars5/5How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition Rating: 5 out of 5 stars5/5Options Trading Crash Course: The #1 Beginner's Guide to Make Money with Trading Options in 7 Days or Less! Rating: 5 out of 5 stars5/5Stock Investing For Dummies Rating: 5 out of 5 stars5/5Girls That Invest: Your Guide to Financial Independence through Shares and Stocks Rating: 5 out of 5 stars5/5Just Keep Buying: Proven ways to save money and build your wealth Rating: 5 out of 5 stars5/5ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years Rating: 5 out of 5 stars5/5Principles: Life and Work Rating: 4 out of 5 stars4/5The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns Rating: 4 out of 5 stars4/5Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple Rating: 5 out of 5 stars5/5How to Invest in Real Estate: The Ultimate Beginner's Guide to Getting Started Rating: 5 out of 5 stars5/5Small and Mighty Real Estate Investor: How to Reach Financial Freedom with Fewer Rental Properties Rating: 0 out of 5 stars0 ratings
Reviews for Investing
0 ratings0 reviews
Book preview
Investing - Mark Wylie
Investing: the Tortoise or the Hare approach?
Mark Wylie
* * * * *
With investing you need to know what you don’t know
.
* * * * *
http://www.bpiwealthmentors.com.au
Investing: the Tortoise or the Hare approach?
Mark Wylie
Copyright Mark Wylie 2012
Smashwords Edition
All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission.
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please purchase your own copy. Thank you for respecting the hard work of this author.
Layout by Michael Hanrahan: www.mhps.com.au.
Cover design by Rob Cowpe.
Cover clipart by KJ Pargeter: http://clipartof.com/1082107
National Library of Australia Cataloguing-in-Publication data:
Author: Wylie, M. A. (Mark A.)
Title: Investing: the tortoise or the hare approach? / M. A. Wylie.
Subjects: Investments – Australia
Stocks – Australia
Finance, Personal – Australia
Dewey Number: 332.6322
Disclaimer
The material in this publication is general comment only, and neither purports nor intends to be advice. Readers should not act on the basis of any matter in this publication without considering professional advice with regard to their own circumstances. The author and publisher expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything and of the consequences of anything done or omitted to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication.
* * * * *
About the book
Investing: the Tortoise or the Hare approach? is a practical guide that builds on Mark Wylie’s first three successful books about long-term investing. The author shows how his methods can be successfully implemented by people who don’t have much time or technical knowledge to perform detailed investment reviews and research. Mark examines how to construct a wise portfolio with a margin of safety, including equity indexes, exchange-traded funds (ETFs), property indexes, bond indexes and cash.
Investing: the Tortoise or the Hare approach? includes information on:
• choosing which investments to buy and which to stay away from
• adding index funds, ETFs, listed investment companies and managed funds to your portfolio
• when to buy, hold and sell
• minimising fees and costs
• constructing and maintaining a portfolio
• reviewing your investments
• the causes and effects of booms, busts and debt.
Investing: the Tortoise or the Hare approach? is ideal for those small investors who are looking for an approach that will identify more stable investments that should deliver long-term returns. This approach is also suitable for DIY superannuation investment funds and is particularly effective during times of market pessimism.
About the author
Mark Wylie lives in South Australia. Favouring a fundamental and analytical approach to investment, he has undertaken research into Warren Buffett’s methods. Mark holds a diploma in Financial Advising, and in 2002 launched BPI Wealth Mentors with the objective of helping small investors understand long-term investing and prepare a set of strategies for themselves that would yield profitability and improved returns into the future.
Mark has authored three books about long-term investing. He experienced up close the substantial world market correction of the global financial crisis – the worst since the Great Depression – and now in this book shares the knowledge he has gained about the boom-to-bust cycle.
* * * * *
Also by Mark Wylie
The Long-Term Investor
Wise Investing with a Margin of Safety
The Sensible Australian Investor
* * * * *
Contents
1. Introduction
2. Markets over long timeframes
3. Small investors
4. Establishing the intrinsic value of investments
5. Why it is so difficult selecting individual companies for investment
6. Listed and unlisted investment options
7. Cash, bonds and deposits
8. Portfolio creation and management
9. When is it best to buy and hold investments?
10. When is it best to sell investments?
11. Value averaging – an alternative investment strategy
12. The problem with debt when markets turn down
13. Fees, charges and tax
14. Conclusion
Appendix A: Calculating intrinsic value – discounted cash flow explained
Appendix B: Eight steps to successful investing – the Tortoise solution
Investment glossary
* * * * *
1. Introduction
Investing: the Tortoise or the Hare approach? is my fourth book. I hope it will give budding investors real insight into the investment arena.
I have written this book for ‘mum and dad’ investors, not professionals – because they always know better! It’s going to be controversial on some issues and go against what your traditional investment adviser or broker will recommend. But remember their job in life is to create transaction fees for themselves!
The global financial crisis (GFC) has changed my investment focus to protecting my capital more than I did before the crisis. Long-term investment success is about ensuring a large margin of safety to protect your hard-earned capital. Selecting the right companies/investments to invest into is extremely difficult for us small investors, and even the professional investment managers are not consistent enough over the long term. A very few – such as Warren Buffett and George Soros – are, and they are extraordinary investment capital allocators.
The small investor has limited or no access to the real need to know
information about a company/investment. You need to know what you don’t know
. But it is very hard to obtain that sort of information in time to act on it!
This book will help you invest with a more global perspective and help you to understand the potential pitfalls of investing over your lifetime – which sometimes is not long enough for the stockmarket!
I wish to truly thank my family Ali, Jaeger and Tas for their continued support when I was too grumpy or preoccupied to participate in life as a normal person during the GFC.
Your investment challenge is to find what works for you, and I do hope this book will assist with this very important endeavour.
Wise investing,
Mark Wylie
Glenelg North
June 2012
* * * * *
2. Markets over long timeframes
"Do not go where the path may lead; go instead where there is no path and leave a trail."
Ralph Waldo Emerson, writer and philosopher
Over long timeframes markets tend to follow trends, and in the shorter term fluctuate above or below these trends. These shorter term fluctuations are caused by the daily information and news that is distributed about the various companies. Benjamin Graham, a world famous investor, called these short-term movements Mr Market
, and he is either very excited or he is very depressed! This occurs from one day to the next.
The long-term trends will be either upward trending or downward trending. A long-term downward trend would indicate a declining product, service, company, industry or sector; for example, a VHS video product when DVD was introduced. One would be best to stay away from these as they can cause erosion of your capital. The ones you should look for are the upward trending ones;