The Philosophy of Wealth

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The Philosophy of Wealth

Table of Contents

Wealth is the elusive dream

Universally sought but practically achieved by only one in a thousand of the world’s population, wealth is nevertheless one of the easiest attained of life’s challenges.

Property as an Investment

Property is a poor performer unless you fully understand what you are doing.

Investing in Gilts and the Money Market

Gilts are universally regarded as the safest of all forms of investment but are at risk because of the hazards of inflation.

Investing in Shares

Why well-chosen blue chip shares offer the safest tax-free returns.

Why share trading seldom pays

Taxation and brokerage charges have stripped share trading of the advantages they formerly offered.

Defining an investment grade share

Investment grade shares have clearly defined balance sheet statistics.

Why value investing became fashionable

Since taxation stripped share trading of its profitability, it has become increasingly important to be able to select the long-term winners.

Refining the share selection process

The search for “The Grand Old Favourites.”

In search of reliability and performance.

Companies that have paid consistently-increasing dividends over many years have become highly valued investments.

Summarising what we have learned

Six methods of share selection_and then a seventh exponential approach that really delivers growth.

How do these shares rate long term?

If you seriously want a portfolio to go to sleep on, then your only safe situation would be to buy one consisting solely of the Grand Old Favourites

The dividend trend is everything?

Even so an occasional trade might pay provided one could develop a really reliable indicator of impending change

Signs of an impending price change!

Dividend trend changes signal impending price changes in most classes of shares.

How to distinguish share quality

What makes a rising star a long-term investment grade share.

How to distinguish the long-term performers

Its all about market capitalisation.

Adding a few new categories

Balance sheet statistics that distinguish the top-performers.

Low tradability shares perform better

Tightly-held shares should in theory under-perform the average, but if they have quality credentials they outperform it.

Return on retained earnings

What a company does with its undistributed profits distinguishes the top performers.

Balancing reward with risk

Introducing the concept of measured risk.

Creating a basis for evaluating risk

Comparing the relative risk ratings of various categories of investments.

How much risk can an individual afford

The degree of risk you can cope with depends upon age and circumstances.

Understanding the need for diversification and the role of cyclic profit companies

Diversifying a portfolio is just as much about balancing categories of shares as it is about numbers.

Recognising that different people have different investment needs:capital growth versus income growth

Most investors believe that share selection is all about aggregate price growth when in truth many actually need income growth. Appreciating the difference.

How to construct a portfolio

The nuts and bolts of putting together a portfolio tailored to one’s personal needs.

How to anticipate big market crashes

Learning how to anticipate those regularly recurring market crashes and how to take avoiding action.

How to predict optimum share buying and selling points

It is one thing to be able to choose the best shares and quite another to know when to buy and sell.

Using simple chart formations to recognise signs of impending market change

Learning how to recognise a few simple technical analysis patterns can greatly assist your buying and selling.

Corporate pyramids can be a dangerous trap for unwary investors

Understanding why pyramid companies are seldom attractive for investors.

Preference shares can be an attractive option when interest rates are low

Understanding the difference between Ordinary and Preference shares and why they pay a higher dividend.

Why I do not favour Unit Trusts

High management fees and poor returns have made unit trusts relatively unattractive investments.

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