The Hardest Thing To Do In Investing

Recently I got into a discussion about the hardest to do in investing. Like it or not, emotions always come into play when it comes to investing. Some investors identify the fallacies and try to remove emotion from the decision making process and succeed, while most people tend to fall for the inherent psychological nature we humans are programmed with. Investing at some point in time becomes more about understanding human/market emotions and psychology than anything else.

Investing to grow our assets over the long run is a shared goal that we all have, but it is also important to remember that it is a zero sum game. Every time you buy a security on the market, there is a seller and vice versa. So, we need to ask ourselves the question: what does the counterparty know that we do not. Is the other person buying or selling with potentially more information/knowledge on the matter or is the move based on ignorance? This is really hard to fathom on a scale as big as the stock or bond market and macro issues that are not under anyone’s control. Chances are, there is no one single answer for all cases. As they say, predicting the future is a fools errand, but so is ignoring market psychology.

With that mind, I wanted to discuss what is the hardest thing to do in investing? I gather it is one of the three options below. Whether you agree or disagree, feel free to share your thoughts in the comments section below.

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Simply Investing Review

I recently came across Simply Investing and realized that it was run by a blogger here in Ottawa, Canada. Not only that, we both work in the same industry and our offices are within a couple of kilometers from each other. Needless to say, we had to meet up for lunch and chat all things investing and blogging. This was my first time meeting another blogger in real life, and I have to admit that it was very refreshing and a fun lunch to chat about our common interests.

Kanwal, founder of Simply Investing, has been investing, blogging, and teaching for years now and he asked me to review his Simply Investing Monthly Report and offer it to my readers as a sweepstake. As a special, one Roadmap2Retire reader will get free subscription for 12 months (of value $240) and other Roadmap2Retire readers will get a 15% discount. What does the Simply Investing Report offer? Read on.

Simply Investing Report

Simply Investing Report is Kanwal’s way of presenting dividend growth companies that can be potential investment targets based on 12 Rules. These rules include qualitative aspects such as whether a company is recession-proof, has a competitive advantage in the sector etc as well some quantitative rules such as debt ratio, P/E ratios etc (see the full list of rules in the image below). Based on these rules, the US and Canadian companies are presented each month that are undervalued and overvalued. The universe of stocks selected comprise of 60 US dividend stocks and 50 Canadian dividend stocks. In addition, Top-Five picks are presented at the beginning of the report for US and Canadian markets. This provides a quick overview and a short thesis on why a particular stock made it to the list. It is also interesting to note that each report also contains overvalued stocks — which can provide some perspective on which companies to avoid. The data in Simply Investing Report is published in PDF form for easy reading, but for the DIY investor, an excel sheet is also provided, so that investors can sort data according various metrics presented.

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3 Recent Buys – PAAS, FNV, NMI

Whenever I make a purchase, I like to share my buys to document my journey towards financial independence. As regular readers are aware, I have broken from the DGI pack and sold some of my investments to move to a cash position. I shared details on my motivation to do so in this post. In that post, I have indicated that I am bullish only on one type of investment currently — hard asset, and more specifically gold and silver.

Earlier in the month, during the Chinese national holidays of Golden Week, the gold and silver market saw significant pullbacks — thanks to the paper traders and shorts having a field day week. It was a great opportunity for investors like me to load up on some gold/silver equities at a discount. I managed to pull trigger on three such instances. One incremental addition to an existing position and two new stocks for my portfolio.

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Kansas City Southern Dividend Stock Analysis

Kansas City Southern (KSU) is the smallest of the North American Class 1 railroad companies. The company commands 6,500 miles of rail network serving southern US with seamless cross-border service to Mexico. The company serves 12 Gulf ports and 1 Pacific Ocean port. The following system map image demonstrates the scale and reach of Kansas City Southern.

(Image Source: Kansas City Southern IR)
Kansas City Southern own 100% of subsidiary Kansas City Southern de México, S.A. de C.V. (“KCSM”), which has a 50-year concession from the Mexican government and could expire in 2047 unless extended – to operate the KCSM arm. The company directly competes with Ferrocarril Mexicano, aka FerroMex (which is partly owned by Union Pacific) inside Mexico.

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Quarterly Update – Q3 2016

Welcome to the quarterly update for Q3 2016. This is part of  a series where I track our financial progress on a quarterly basis. I present four parts in this series: (i) Investment & Portfolio Update, (ii) Passive Income Update, (iii) Blog Update, and (iv) Goals Update.

1. Investment & Portfolio Update

Q3 2016 saw a lot of activity in our portfolio.
We initiated/added to the following positions.
We closed the following positions.

Q3 saw 4 dividend increase announcements in our portfolios. The companies from our portfolios increasing their dividends and details of portfolio changes are summarized below.