Beating The Index: Weekend Edition

Welcome to the weekend edition, a small collection of links to interesting personal finance related articles and news from around the web.

Did you see that plunge yesterday? 700 billion dollars of capitalization wiped out in 10 mins! To tell you the truth, I need a couple of days to mourn. I did not have any capital left to deploy. In days like these, this is when you buy quality in quantity cheaply! So many stocks out there were low hanging fruit ripe for the picking, but I had a dismal purchasing power left, 2000$ to be exact. So far, my portfolio has survived the turmoil, it is obvious that the silver stocks I am holding held their ground and made all the difference.

Last Friday I contacted my financial advisor for an investment dedicated line of credit that I would use when I needed. He did not get back to me yet. Had that account been in place, I would have been as happy as a kid with money to blow at Toys R US. Time to give it to him when he ends up returning my calls…

In this environment, you either have the discipline to shut down your emotions and buy out those opportunities or you are simply emotionally routed selling out and hiding what is left of your capital. Listen, the sky isn’t falling, and if one day it does fall, well it will crush everybody. Until then, capitalize on other people’s fears and exploit “buy low sell high” to its maximum. If we recovered from all our crashes in history, chances are we will recover from these corrections.

Here’s a list of interesting readings for the weekend:

#1 9 Myths We Can’t Afford: Can the Printing Press Achieve Paradise on Earth?

“The printing press: A fearsome, powerful tool. Used in the hands of a private man, he is branded a counterfeiter, and rightly so; his fake bills were created into existence without any value in exchange.

Used in the hands of the government, however, the printing press suddenly becomes a legitimate policy tool, used to manipulate the shape and direction of the economy. The government becomes the circus master, and we are the animals in the circus.”

Excellent article by Kevin at Invest it Wisely.

#2 Markets sent reeling after possible trading error

Here’s a summary of what happened yesterday by the Globe and Mail.

#3 Citi Trader Allegedly Causes Big Market Moves

The market was looking for a reason to drop. It was on the verge of a correction. So was it a trading error? Or was it the correction everyone was expecting?

#4 Did Greece Crash the Stock Market?

Here’s more analysis on yesterday’s drop by GetMoneyEnergy. That should be enough to cover the drop from all perspectives without having to read tons of articles in the weekend.

#5 Owning Rental Property vs. Owning REITs

Million Dollar Journey has a great post on rental Property vs REITS. Frankly, I believe it is safer to own the property and rent it but less work to own the REIT for the same yearly return. If I grow a couple of zeroes in my portfolio, I’ll consider real estate as a form of diversification. I’ll worry about it by then.