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Showing posts with the label The power of the individual investor

What is the Consumer Price Index (CPI)?

What is the Consumer Price Index(CPI)? The Consumer Price Index (CPI) is a measure of the change in prices paid by consumers for a basket of goods and services. It is one of the most widely followed economic indicators, and it is used by investors to gauge inflation and make investment decisions. How is the CPI calculated? The CPI is calculated by the Bureau of Labor Statistics (BLS). The BLS surveys households across the United States to collect data on the prices they pay for goods and services. This data is then used to create a "basket" of goods and services that represents the spending habits of the average American household. The BLS calculates the CPI by comparing the prices in the basket of goods and services in a given month to the prices in the same basket of goods and services in a base year. The base year is usually 2000. How does the CPI affect investing? The CPI is an important indicator of inflation. When the CPI rises, it means that the cost of living is incre
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The Importance of Action and Small Investments

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Investing in stocks is often referred to as a miniature economy with complex processes. Because of this complexity, many people think a lot about investing in stocks, but often fail to take action. In this article, we'll explore the essence of investing in stocks, highlighting the importance of action, the possibility of small investments, misconceptions about economic conditions, and the need to practice your investment strategy. Stock investing is all about action You can hear and see a lot of things, but you won't know their value until you put them into practice. Having only theoretical knowledge won't get you far in the real world of investing, and the same goes for stock investing. Even if you know a good investment strategy, you won't know its value until you put it into practice. Small investments matter There's a misconception that you need a lot of money to start investing in stocks. But in reality, you can start investing with a small amount of money. It&
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The power of the individual investor

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The power of the individual investor: strategies for taking on the big boys Many retail investors feel like they are at a disadvantage compared to institutional and foreign investors. However, the reality is that retail investors have a number of unique advantages. In this article, we'll take a closer look at those advantages. Paycheck to paycheck: the limitations of institutional fund managers First, let's look at the constraints faced by institutional/foreign fund managers. While they typically manage large amounts of assets based on their specialized knowledge and experience, they are also constrained by the fact that they are "salaried". This means that if they don't perform, they lose their jobs. For example, what if someone like Warren Buffett was an ordinary fund manager during the IT bubble of 1999? Even if he approached IT stocks cautiously based on his philosophy, his company's management would demand short-term performance. As a result, Buffett woul
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