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Market Weight vs. Equal Weight S&P 500 ETFs (RSP vs SPY)

RSP vs SPY vs MDY Historical Performance Max

The S&P 500 is a market capitalization weight index. This means that larger companies make up larger percentages of the index than smaller companies. The percentage is calculated by taking the market capitalization of the stock and divided by the total market capitalization of the entire index. For example, the largest company in the S&P … Read more Market Weight vs. Equal Weight S&P 500 ETFs (RSP vs SPY)

Portfolio Rebalancing Strategies: How and When to Rebalance Your Portfolio

Portfolio Rebalancing Strategies: How and When to Rebalance Your Portfolio 5

Most investors use asset allocation as a core investing strategy. This means investing a specific amount in each investment, which could be viewed as slices in a pie. At the high level, these pies are different asset classes like equities, fixed income, real estate, commodities, and cash. Within each pie, an investor also decides a … Read more Portfolio Rebalancing Strategies: How and When to Rebalance Your Portfolio

A Guide to Dividend Reinvestment Plan (DRIP)

A Guide to Dividend Reinvestment Plan (DRIP) 12

A Dividend Reinvestment Plan, or DRIP, is an easy way to buy more shares using the dividends you received from your stocks. With this plan, you grow the number of shares you have over long periods of time. Many companies offer their shareholders the ability to convert dividends into additional shares of stock directly without … Read more A Guide to Dividend Reinvestment Plan (DRIP)

Dividend Investing Basics, Advantages, and Disadvantages

Dividend Investing Basics, Advantages, and Disadvantages 16

One of the more popular investment strategies is to invest in dividend-paying stocks. In this article, we will go over the basics about what are dividend stocks and the advantages and disadvantages of dividend investing. Dividend investing is a powerful method to grow your wealth while generating regular income. Depending on your financial situation, you … Read more Dividend Investing Basics, Advantages, and Disadvantages

Invest in Peer-to-Peer Lending with Lending Club, Returns and Risks

Invest in Peer-to-Peer Lending with Lending Club, Returns and Risks 22

I have been lending in peer-to-peer lending networks like Lending Club and Prosper for about ten years now. Today, I want to share with you some of the things I have learned, and you can decide if this is the right investment for you. For those looking for quick answers: yes, peer-to-peer lending is a … Read more Invest in Peer-to-Peer Lending with Lending Club, Returns and Risks

Asset Location: Best Accounts for Different Investments

Asset Location: Best Accounts for Different Investments 29

Asset Location is a tax-efficient investing strategy to help you minimize taxes and grow your investments faster by holding investments in the best-suited investment accounts.  This strategy leverages the fact that investments in Roth IRA and 401(k) are tax-free, and investments in Traditional IRA and 401(k) are not taxed until the money is withdrawn. For … Read more Asset Location: Best Accounts for Different Investments

Compound Interest Formula and Examples

Compound Interest Formula and Examples 36

One of the most powerful forces in finances is compound interest. Compound interest is interest that is paid on the principal and also on the interest that previously earned on your investment. This helps you grow your investment at an accelerated rate. On the other hand, compound interest can work against you — for instance, … Read more Compound Interest Formula and Examples

Compound Annual Growth Rate (CAGR) Calculation and Examples

Compound Annual Growth Rate (CAGR) Calculation and Examples 41

You may have come across references such as the S&P 500 has grown 10% annually for the past 30 years or something to that effect. You may wonder what that means and where did they get that number. When someone mentions an annualized return, most likely he is referring to the Compound Annual Growth Rate or … Read more Compound Annual Growth Rate (CAGR) Calculation and Examples

18 Common Retirement Investing Mistakes and How to Avoid Them

18 Common Retirement Investing Mistakes and How to Avoid Them 48

Learn from your mistakes is good advice, but learn from other people’s mistakes is even better. I’ve been investing since 1996. In the process, I have learned a lot, mainly from trial and error. Today, I’d like to share some of the mistakes I’ve made when I was a newbie investor, along with some pitfalls … Read more 18 Common Retirement Investing Mistakes and How to Avoid Them