Money Archives

Warren Buffett’s Wall Street Criticisms

How to Invest Wisely in the Stock Market

Why does Warren Buffett criticize the Wall Street approach? What are some ways in which Wall Street investment firms mishandle investors’ money? According to Warren Buffett, Wall Street’s business-as-usual practices highlight many areas in which most investment companies don’t serve the interests of the people whose money they steward. Specifically, Buffett highlights the failings of CEO culture, shady accounting, overpriced acquisitions, and the systemic dangers of financial derivatives. Keep reading to learn about Warren Buffett’s criticisms of Wall Street’s practices.

Bond ETFs vs. Bond Mutual Funds: Which Are Better?

What is the difference between bond ETFs vs. bond mutual funds? Which delivers a higher return on investment? Bond mutual funds are actively managed funds where investors’ capital is distributed among select securities. In contrast, bond ETFs purchase securities that reflect certain bond indices. According to John Bogle, the author of The Little Book of Common Sense Investing, bond index funds deliver better returns than bond mutual funds. Here’s why bond ETFs are more profitable than bond mutual funds, according to Bogle.

Warren Buffett’s Philosophy and Investing Best Practices

What is Warren Buffett’s investment philosophy? What is the best piece of advice you can take on board from the world’s most successful investor? The key philosophy that Buffett drives home is that owning a stock means owning a piece of an actual, real-world business. Using this “owner mindset” as a starting point, Buffett provides guidance to reasonable expectations, best practices in investing, and certain pitfalls to avoid when investing. Keep reading to learn about Warren Buffett’s philosophy and best practices for investing.

How to Financially Prepare for a Recession Without Money

Wondering how to financially prepare for a recession? How can you prepare if you’re living paycheck to paycheck? For more than a year, economists have predicted that the U.S. will enter a recession. Many Americans, through no fault of their own, don’t have the financial means to take the steps that many financial experts recommend to navigate a recession. Read on to learn how to financially prepare for a recession without an emergency savings fund.

The Disadvantages of Mutual Funds: Everyone Can’t Win

How do mutual funds work? Why do mutual funds underperform index funds? Mutual funds generate profits for their investors by beating the market-average returns. According to John Bogle, the author of The Little Book of Common Sense Investing, doing so is a zero-sum game: For every investor whose returns are above-average, there must be another whose returns are below-average. Keep reading to learn about the disadvantages of mutual funds.

The Essays of Warren Buffett: Lessons for Investors & Managers

What is the book The Essays of Warren Buffett about? What is the key message to take away from the book? Compiled from Buffett’s annual reports to Berkshire Hathaway shareholders, The Essays of Warren Buffett provides a glimpse into the mind of a man whose ideas contrast with those of the typical Wall Street mogul. His insights on investing are simple yet difficult to put into practice, while his thoughts on the culture of the wider business world shine a light on the values that shape modern finance. Below is a brief overview of The Essays of Warren Buffett: Lessons

Compound Interest in the Stock Market: How It Works

What exactly is compound interest? Do index funds benefit from compounding? Compound interest is the interest earned on reinvested gains. Because interest compounds over time, your money grows exponentially instead of linearly. However, your losses also compound, which means that your actual return on investment might not match the market’s average return. Here’s what you should know about the effect of compound interest.

Why Warren Buffett Is Against Diversification

Why does Warren Buffett advise against portfolio diversification? What’s the problem with diversifying your investments? How does diversification hurt your return on investment? Portfolio diversification is a sacred cow in the world of investing. However, the world’s most successful investor, Warren Buffett, scorns the idea of diversifying your portfolio to protect against risk. Keep reading to learn about Warren Buffett, diversification, and why it’s better to have skin in the game.

Warren Buffett on Derivatives: “Weapons of Mass Destruction”

What exactly are financial derivatives? Why does Warren Buffett scorn derivatives? Derivatives are contracts between two parties in which one pays the other if some other financial instrument (for example, a stock or a bond) reaches a certain price, up or down. On derivatives, Warren Buffett famously said: “Derivatives are financial weapons of mass destruction.” Here’s why Warren Buffett warns against derivatives.

Leveraged Buyouts: What Are They and How Do They Work?

What are leveraged buyouts? How do takeover companies profit from acquisitions financed with leverage? Leveraged buyouts were the hallmark of many notorious “corporate raiders” in the 1980s, who used them to practice so-called “hostile takeovers.” Takeover companies make fortunes with leveraged buyouts, but they carry significant social and financial costs. Keep reading to learn about leveraged buyouts, how they work, and their consequences.