A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Monday, March 28, 2005

The Future for Investors - Part 2

The whole premise of Jeremy Siegel's latest book The Future for Investors is that investors can achieve a better rate of return over the long run by concentrating on the stocks of companies that have been around a while instead of newer, more exciting companies.
The reason for this is that people tend to be too optimistic and pay too much for the stocks of newer companies, putting expectations on them that most cannot fulfill. Siegel said that through his research he found that the companies that did the best for investors were the companies that grew their earnings faster than the market expected.

I'll dedicate the next several posts to discussing this topic. Stay tuned.