Amanda Stanhaus

Tag: diversification


I have rain boots, riding boots, ankle boots, booties and snow boots to wear depending on the occasion. I want just as much variety in my portfolio to perform well, no matter the market.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Exchange Traded Fund

ETF. A mutual fund, but trades like a stock. Pluses include the diversification of a mutual fund and the convenience of stock.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)


Financiers LOVE their acronyms more than $$. The more not obvi(ous) the better!

ETF= Exchange traded fund.

(click on the bold-faced vocab words:))

ETFs are giving Mutual Funds (MFs) a run for their money in the popularity contest that is the stock market.

Why hot?

Best of both worlds: ETFs allow for diversification (like a fund) and frequent trading (like a stock).

Easy access: ETFs don’t have minimum investment requirements like MFs. Good news for newbie investors.

Why not?

Tips: Owners have to pay extra $$ per trade. If dollar cost averaging is your investment strategy, then commissions are your enemy.

Passive Action: Index investing is really the only option for these babies. You have to believe the market is efficient (and be anti-Warren). Do you believe??

When you make the MF/ETF decision…ALWAYS read the prospectus.


(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

How does Mr. Buffett Consistently Pick Winners??

“To invest successfully over a lifetime…what’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.”

Warren Buffett,  Preface to The Intelligent Investor.

(click on the bold-faced vocab words:))

Warren’s favorite framework is value investing. Benjamin Graham wrote the definitive book, The Intelligent Investor.

Here are the book’s highlights:

Speculators and Investors are NOT the same!

“The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.”

Diversification and Margin of Safety are best friends. Both make investing comfy.

Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion…And a  true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.”

Buy at the right price (time) will cause you to laugh (cry) to the bank.

Regardless of market swings, the way to profit from pricing is, “to buy stocks when they are quoted below their fair value and to sell them when they rise above such value.”

Want the most money? Be Brilliant.

“The maximum return would be realized by the alert and enterprising investor who exercises maximum intelligence and skill.”

Interest piqued?  Here is the copy I read.

(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)