testing styles has pros and cons that are better suited for different people. For example, you wouldn't recommend a 20-year-old put half their money in bonds and half their money in dividend stocks. Now, although those are very safe investments, it doesn't take into account the level of risk that that 20-year-old is able to take on and the time horizon they have to withstand that risk.Instead, you'd want to suggest something that has the potential to generate higher returns due to that time horizon. Alterna ...

Investment Strategy & Asset Allocation - A great company isn't necessarily a great investment unless it fits an investor's plan, highlighting the importance of a tailored strategy [1] - Asset allocation should be tailored to personal goals, risk tolerance, and time horizon [2] - Time horizon is crucial when deciding asset allocation between stocks and less risky assets like bonds; shorter time horizons may warrant shifting to less risky assets [4][5] - Neither asset allocation nor overall strategy is static; it should evolve as life circumstances change [6] Investment Styles - Common investment philosophies include deep value investing, high-quality investing, growth investing, and dividend investing, each with different places in a portfolio [7][8] - Deep value investing focuses on companies priced significantly below their intrinsic value, even if they are not exceptional companies [9][10] - High-quality investing focuses on financially strong companies with competitive advantages, held for long-term compounding [11][12] - Growth investing targets companies with revenue growth outpacing the broader market, often in technology sectors, but with higher risk [12][13] - Dividend investing prioritizes recurring dividend payments for a steady income stream, typically from larger, more mature companies with less price volatility but slower capital appreciation [14][15]

Investment Analysis - The report emphasizes the importance of identifying potentially good investments based on their overall standing, competitive position, and industry health [1] - It suggests drilling down into nuanced components of a business's operations, such as financial strength, profitability, and growth prospects [1] Investment Strategy - Understanding a business is only part of the investment process; aligning investments with personal goals and strategies is crucial [2] - The next module will cover outlining a repeatable strategy by understanding personal financial goals, time horizon, and risk tolerance [2]

Financial Statements Overview - Financial statements are essential for long-term investors to analyze a company's investment potential [3] - The three primary financial statements are the income statement, cash flow statement, and balance sheet [4] - These reports provide a snapshot of a business's operations and raw data for investment assessment [4] Income Statement (Profit and Loss Statement) - The income statement reveals a company's revenues, expenses, and profits over a period [5] - It provides insights into profitability and operational efficiency [5] - Key metrics include revenue growth, gross margins, and net income [5] Cash Flow Statement - The cash flow statement tracks how a company generates and uses cash [6] - It helps investors assess liquidity, indicating whether a company can meet its obligations [7] - Key metrics include operating cash flow and free cash flow [7] Balance Sheet - The balance sheet records a single snapshot in time, showing what a company owns versus what it owes [8] - It helps determine the financial strength of a company [8] - Key metrics include total assets, total liabilities, and shareholders' equity [8] Financial Ratios & Analysis - Investors use financial ratios to analyze a company's operations [2] - Guru Focus provides charts to visualize money flow in and out of a company for each financial statement [6]

Investment Analysis Framework - The industry suggests using a quick analytical litmus test to determine if a company warrants investment consideration [1] - Fundamental strength analysis can be efficiently conducted using the GF score [1] - Relative standing against competitors and margin maintenance ability can be assessed via the moat score on Guru Focus [2] - Industry overview tools on Guru Focus can help determine if a business operates in a supportive industry for growth [2][3] - Stocks that meet all three criteria warrant further investigation [3] Further Investigation - Major financial statements reported by publicly traded companies are important for deeper analysis [4] - Key financial metrics and ratios are used to analyze financial reports [4] - Common traps that can trip up investors should be avoided [4] - Developing a deeper level of understanding is crucial for long-term investors [4]

In Module 2.1 of Investing 101, we introduce the three core financial statements — the income statement, balance sheet, and cash flow statement. You’ll learn what each reveals about a company’s performance, why they matter to long-term investors, and how they work together to paint a complete picture of a business’s financial health. Keep learning at GuruFocus.com/GuruUniversity ...

Stock Classification - Market capitalization is a common way to classify stocks, representing the total monetary value of a company's outstanding shares [2][3] - Large-cap stocks, with market capitalization greater than $10 billion, tend to be stable with lower volatility and high dividend yields [4] - Small-cap stocks, with market capitalization under $2 billion, have potential for rapid expansion but carry more risk [5] - Mid-cap stocks offer a balance between stability and growth opportunities [6] Investment Styles - Value stocks trade at a price below their intrinsic value, offering potential opportunities [8] - Growth stocks are expected to have rapid intrinsic value growth, justifying their current market price [9][10] - Dividend stocks are from established companies that distribute profits as dividends, providing a steady income stream [10][11] Investment Vehicles - Mutual funds are portfolios managed by professionals, offering diversification but with management fees [12][13][14] - ETFs (Exchange-Traded Funds) are static baskets of stocks, providing diversification without active management fees [14][15]

Hi, I'm Will and welcome to Investing 101 with Guru Focus. I'm here to help guide you throughout this course. If you're new to the world of investing, it's easy to feel overwhelmed.But you're far from alone there, which is exactly why we put this course together. Here at Guru Focus, we believe in empowering people to take control of their own financial future. Hopefully by the end you'll have the foundational knowledge needed to cut through all the noise out there and utilize powerful tools to make your own ...

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