Mastering Investing

The Right Path For You

Credit Cards This is where we’ll try to help you and ourselves become better investors.
The information will be arranged under four levels of complexity, starting with beginner going all the way to expert.

Investing Styles

Index Funds
Index funds and ETFs are the most suitable choice for investors who do not have the time or interest for investing, but desire exposure to a particular asset. There are two main choices in Australia, though others exist:

  • “Vanguard Index Australian Shares Fund” charges a management fee of 0.75% p.a. for the first $50,000, then 0.50% p.a. for the next $50,000 and 0.35% p.a. for the balance over $100,000. There is also a spread of .2% on purchase and .1% on withdrawal.
  • State Street Spiders ETFs on the top 50 or top 200.Management costs are 0.286% and there will be the bid/ask spread.

Article of Interest
on index funds in Australia.

Active Managers

Statistics do not flatter active managers. However, for an investor with time and knowledge it is possible to find active managers who will outperform their
index over the long haul. The Motley Fool Champion Funds illustrates how this is possible.

DIY Investing

This should only be pursued by individuals who are passionate about investing. This site is dedicated to those investors and over time we aim to provide all the tools and information you need to become a better investor.

There are many paths to investing success. There are many tools to assist with your investing journey.

Fusion Investing is all about choosing which path and tools are best for you. Many investment advisors and experts claim their path is the only path.
Their path may be right for them, but it is folly to believe it is the only path.

Fundamental Analysis

Growth or Value

Fusion investing combines elements from many investment schools; the combination is varied depending on the practitioner. We view differentiations like growth and value as meaningless and prefer to combine aspects of both. This
is not an original thought. Warren Buffett commented on this in his 1992 Shareholders Letter. Rather than paraphrase Buffett we’ll let him speak for himself.

In answering this question, most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” and “growth.” Indeed, many investment professionals see any mixing of the two terms as a form of intellectual cross-dressing.

We view that as fuzzy thinking (in which, it must be confessed, I myself engaged some years ago). In our opinion, the
two approaches are joined at the hip: Growth is always a component in the calculation of value, constituting a variable whose importance can range from negligible to enormous and whose impact can be negative as well as positive.

In addition, we think the very term “value investing” is redundant. What is “investing” if it is not the act of seeking
value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value – in the hope that it can soon be sold for a still-higher price – should be labeled speculation (which is neither illegal, immoral nor – in our view – financially fattening).

If you have not read Buffett’s Berkshire Hathaway Shareholder Letters we strongly encourage you to do so.

Fusion investing combines growth and value, but our cross dressing doesn’t end there. We also seek the best tools and methods from fields which analysts consider diametrically opposed. We combine elements from fundamental and
technical analysis. While many investment professional view this as a marriage destined to fail, we see a marriage made in heaven. A quick example of this marriage is using fundamental analysis to select a company and then using
technical analysis to assist in the actual purchase.

Another important tool in fusion analysis is investor sentiment. In this article Inya Ivkovic discusses integrating fundamental analysis with investor sentiment. Ivkovic notes how “noise traders” often push assets prices
great distances from their intrinsic values. Benjamin Graham, the father of security analysis, said “In the short run the market is a voting machine, and in the long run it is a weighing machine”. Fusion investing is about profiting from
understanding both the voting and the weighing.

In summary fusion analysis and investing combines fundamental, technical and behavioural investing with no regard to traditional asset classes.


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