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In this series, we will teach you 5 things about the stock market in less than 5 minutes.
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1οΈβ£ The impact of taxes on compounding
Costs and taxes hurt your investment results.
Try to postpone paying taxes as long as possible.
2οΈβ£ The power of big tech
Today, Appleβs market cap is equal to the sum of the bottom 180 companies within the S&P 500.
Donβt focus solely on big tech. Small cap stocks outperform the market in the long term.
3οΈβ£ One simple investment quote
Donβt use debt to buy stocks.
Every debt is ultimately paid, if not by the debtor, then eventually by the creditor." - James Grant
4οΈβ£ Warren Buffett on inflation
Inflation harms your wealth.
The best way to protect yourself against inflation is buying quality stocks with high gross margins.
5οΈβ£ Example of a Quality Company
Automatic Data Processing is a global provider of business outsourcing solutions (human resource, payroll, taxes, β¦).
The company has a free cash flow margin of 17.7% and should be able to grow its FCF with 15% per year until 2025.
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About the author
Compounding Quality is a professional investor which manages a worldwide equity fund with more than $150 million in Assets Under Management. We have read over 500 investment books and spend more than 50 hours per week researching stocks.
π° The impact of taxes on compounding
That chart on the effect of taxes really shows a lot. Not enough people talk about taxes, they only mention how many X they gained.
Nice