Weiss Ratings – How to avoid bankrupt investments!
Weiss Ratings uses a reward/risk model to help an investor get a high-level view of a stock, mutual fund or ETF with little time and effort. Without exception, I look at the risk element before buying any investment. The risks include volatility, solvency, undervalued stock and overvalued stock measures. Be vigilant regarding solvency. At the heart of the matter for every investment is the company’s ability to stay in business not only in good times, but difficult times. All companies tend to experience hard times. You don’t want your investment to go to zero in value because management borrowed too much to pay expenses and cover debt or fund growth.
A cardinal rule of budgeting is “spend less than you make and save the rest.” This is wise for both businesses and individuals. A cardinal rule for investors is, “don’t buy struggling debt-laden companies or ETFs that invest in those businesses.”
While it costs money to use Weiss Ratings, does it cost money to buy bad investments? The price of a good investment ratings service is far less than the costs and losses from bad investments.