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Tag Archives: risk
Today I want to talk about information overload. Investors today are bombarded with more information than ever from an expanding array of sources. Many think this is a good thing but in reality it mainly leads to investor under performance. Investors and traders need to learn how to narrow their focus, limit their information intake, in order to increase their chances of success. I’ll share a few bits of info on this phenomenon and tell you how I deal with it. First, I’ve blogged about information overload and under performance before. A snippet form that old post; Investor’s today have … Continue reading
In several previous posts on mortgage REITs (mREITs) I have discussed the basics of understanding them, that there could be a good investment opportunity in them, and I presented an economic model that breaks down their sources of earnings and dividends. Now, its time to address the very important topic of the risk in investing in mREITs and how an investor can gauge and monitor that risk. There are three main sources of risk in mREITs; credit risk, liquidity risk, and interest rate risk. Note, that I do not consider the market’s standard definition of risk, volatility, as a source … Continue reading
MLPs offer attractive tax-deffered yields and total returns. MLPs have handily outperformed the S&P since 1996 and look to continue to do so. With the emergence of unconventional oil and natural gas plays in North America the sector is also in major growth mode. But most investors think that MLPs are higher risk – after all we’ve all been brainwashed into thinking that higher returns must come with higher risk. Turns out that nothing could be further from the truth. There is a ton of academic research that has disproved the higher risk equal higher return mantra. Today I want … Continue reading