Benjamin Franklin once said, “An investment in knowledge pays the best interest.” That’s a philosophy we wholeheartedly believe at ValueWalk as we cover all aspects of the ever-changing world of personal finance and investing.
The challenge with investing is that no single approach will be right for everyone. A 65-year-old eyeing retirement should approach their portfolio very differently from a recent college graduate in their 20s. That said, there’s plenty to be learned from fellow investors. That’s why over the next few months, ValueWalk is going to feature some notable personalities in the finance space in our ongoing “Finding Value” series. These snappy Q&As will feature brief insights into current investing trends and practical takeaways from real-life experiences.
Up first, we’ve got our very own Dave Kovaleski on tap. Dave is the most senior writer on ValueWalk with over a thousand articles on the site. His writing has also appeared on The Motley Fool, Yahoo Finance, USA Today and many other outlets.
It’s safe to say he’s got some perspective on investing. Let’s get right to it:
ValueWalk: What do you do for a living?
Dave Kovaleski: I write articles about stocks for ValueWalk.
What’s your investment philosophy, and how has it evolved?
I tend to favor value stocks, stocks trading below their intrinsic value for one reason or another. But ultimately, it is most important to have a diversified portfolio with a mix of other investments, like growth, crypto, and some broad ETFs.
What’s the best investment you’ve ever made?
I’m still waiting for it. I’ve been waiting for a couple of crypto investments to pop, namely HBAR and XRP. Probably my best investment over the years is a boring one, Amazon. But Amazon has been such a great stock for such a long time. It is a market leader in two different areas – ecommerce and cloud computing – that’s hard to beat.
What’s the worst investment you’ve ever made?
I invested in an EV company called Ideanomics a few years ago. I held on to the stock way too long waiting for its fortunes to turn, but it just kept going down. I finally cut my losses and moved on. The company ultimately filed for bankruptcy last year and is being sold off for parts.
What advice would you give someone who is just getting started with investing?
Invest in ETFs. Rather than try and find the individual stock winners, invest in a broad ETF, like one that tracks the S&P 500. You have a ready-made diversified portfolio in one investment and the S&P 500 has averaged about a 12% return over the last 10 years and about 10% over the past 20 years. You just set it and forget it. Over time you can add to your portfolio with ETFs that track growth, value, and other styles and sectors.
What’s a financial decision you’ve made that ran counter to popular wisdom but worked out?
I bought a timeshare years ago on the cheap and it has been a great investment because we use it every year, sometimes multiple times a year. Through it, my family has had the opportunity to stay in great resorts all over the world for a price I never would have been able to afford otherwise.
Investors should definitely watch out for high-flying AI stocks with no real earnings or stocks with P/E ratios well above their historical averages.
Dave Kovaleski
What financial trends are you most interested in over the next few years?
Whether or not the AI stock bubble bursts. Stocks are nearing historically high valuation levels — at or near levels reached in 2021 before the 2022 bear market and nearing dotcom era levels. Investors should definitely watch out for high-flying AI stocks with no real earnings or stocks with P/E ratios well above their historical averages.
What’s your favorite stock right now and why?
Probably Berkshire Hathaway. Yes, Warren Buffett’s leaving, but I have faith in the new leadership, who have been there for decades. Plus, Berkshire has a ton of cash sitting on the sidelines, waiting to deploy. Given the uncertainty in the market and the fact that Berkshire has always performed well when the larger market doesn’t, it makes a lot of sense right now.
Disclaimer: Articles in the Finding Value series should not be construed as investment advice and are for entertainment purposes only. The views and opinions expressed in this article are those of the interview subject and do not necessarily reflect the official policy of the company.
