Millennial Money – How Young Investors Can Build a Fortune by Patrick O’ Shaughnessy

I read Millennial Money How Young Investors Can Build a Fortune by Patrick O’ Shaughnessy – and learnt the following main points to help you build your balance sheet

  • invest early and often and take advantage of compounding as the future generation will not have the luxury that their parents had in stable pension funds and social security
  • buy low cost index funds(especially smart indexes) and stay in the market and your investment will grow at a nice pace over time but superior returns are possible by using the principles in this book
  • Look at value over growth,Quality over junk, follow the trend,
  • Focus on the long game and set your investment time horizon over say 30 years
  • Some of the strategies looked at are: Stakeholder yield is greater than 5%,Return on invested capital is greater than 30% ,Operating cash flows is greater than reported profits(earnings quality), enterprise value to free cash flow is less than 10 times and the 6 month momentum is in the top 3/4 of the market

So in a nutshell invest in quality companies at an early age and you can used a smart index or ETF  to do it and stay in the market for the long term – I am certainly going to teach this one to my kids and also get the strategy implemented