5 Bright Ideas That You Need To Know To Invest in 2015
From finding the bargain stock to measuring the impact of the Fed raising rates, investing in 2015 will be as uncertain as 2014. Some innovations from 2014 will carry over into 2015. The first one is big idea thinking. The economist Thomas Piketty believes that “r>g” or return on owning capital tends to be faster than economic growth. 2015 is set to be a big year for the United States with oil prices starting the year low and job growth expected to be high it might be the right time to put your money to work by investing in capital. If you invested in the S&P last year you would have earned 13% return on your investment.
Learn about the big picture formula and 4 other investing innovations for 2015.
In 2014, Internet-based “robo-advisers” went from a novelty to a force that’s changing how you get and pay for money advice. In a nutshell: They’re driving costs to the floor. Some of investing’s biggest names are going robo. The competition breaks down into two types:
Portfolio Builders: Startups like Betterment and Wealthfront use algorithms to design you a mix of low-cost index funds. They charge no more than 0.25% to 0.35% of assets per year, less than traditional advisers. Giant Schwab has announced a similar, free service. (Schwab is paid in part by putting customers into Schwab’s funds.)
Another way to increase your returns for 2015 is by finding new ways to locate bargain stocks. An old way of doing that was to look at companies that offer huge dividends but if you evaluate on this metric alone you are missing part of the picture. You need to add in stock buybacks which can drive up a company’s share price rapidly. Say company X gives you a 2% dividend and has been buying back it’s stock for the last few years at 3% a year. That would already net you a 5% shareholder yield on one stock!
About Shaun Archer Tatum Shaun works in corporate finance in New York City. He has done financial consulting for several start-ups and has worked at several Fortune 500 companies. He has contributed several finance/investing articles on Seeking Alpha which have been published on Yahoo! Finance.