What is the best way
to start investing for the future?
The best way to
start and continue to invest for a lifetime is a Target-Date or ‘balanced’
fund. Because we don’t know when the market will fall, we can’t time the market
to get out at the right time. People who try this strategy usually lose. In
fact, over time, they usually earn just 3.79%
versus 11% for the ‘keep-investing’ folks. Inflation of nearly 3% reduces
their buying power even further. Why does this happen? Most of us take the
short view; not the long view with our savings/investing dollar. If our quarterly
statement account shows a loss, we opt out of the long-term 11% return. We can ride
out a market fall by using a balanced fund like the low-cost Wellesley
Income Fund. Its allocation of 60% bonds/40% stocks has provided nearly 10%
a year since 1970. So even when stocks fell 37%
in 2008, this
fund had less of a ‘statement’ loss to overcome. Also, some folks seem to
think that when the market falls 37% they actually lose 37% of their money. If
you don’t sell, your fund holds the same number of shares so when the shares
rose 27% and 32% as in 2009 and 2013, your account value still maintain the 10%
a year over time. Stay invested for more: https://www.amazon.com/Millionaire-Mutual-Funds-Save-taxes/dp/1534939490
Are women better
investors than men?
Studies show that women
are willing to wait for their accumulations to grow. Patience
pays, according to Warren Buffett. When women in one study worked with
woman advisors, they held less cash and considered themselves to be more risk
tolerant than men. Consequently, their
returns were higher. Among the participants, those working with an advisor
had a cash allocation almost 15% lower than those with no professional
financial advice. However, when female investors worked with male advisors, two-thirds
of this affect was offset. The data parallels the experience of master investor,
Warren Buffett. Recently, he won his bet with a hedge fund manager using 5
different strategies. Buffett bet $1 million that a simple low-cost index fund
(Vanguard 500 Index fund) would outperform
stock-picking investing. DALBAR keeps track of investor returns and has
shown that over time, a low-cost
index wins: No trading, no market timing, and no chasing earnings. In each
period, advisor-managed accounts earned less than ‘buy and hold’ investors:
3.79% versus 11%. Wall Street is wrong.
How much can your money earn without you?
Do you expect your
money to work for a living? If not, you are losing the largest potential
earnings available. Fidelity looked at its most successful investment accounts.
Guess what? The most
successful accounts were owned by people who died or who forgot they had
them. Lesson: don’t pay anyone
to ‘manage’ your accounts. How can this be true? Warren
Buffett the greatest investor of our time says his success is from ‘compounding.’
If we leave our stock/bond account alone, it will earn money by itself. We do
nothing! For example: Invest $250 a month in Buffett’s recommended account and 33
years later you have about $993,000. You invested $99,000 (3,000 x 33
years). Your money earned $894,400. You did NOTHING but allow $250/month to
work!
When Fed rates fall,
retirees need inflation-buster
If you rely on
‘high’ savings rates to float your retirement income then you better plunge
into 2.5%
paper now. However, with inflation running at over 2%, you are losing your
purchasing power. All your costs are going up and your earnings down. What to
do? The answer is having enough for expenses now and growing your assets for
the future. You must bust inflation wide open or your future income is in
jeopardy. How can you do that safely? A little risk goes a long way. Think of
it this way: part of your assets are for 2 years out and part for 10 years out
and part for 15+ years out. Don’t think that all your assets will be needed at
the same time. You can afford a little risk with those 15 year assets. Your
2.5% works for now but won’t cut it for later. For later, a balanced fund is
best. A long-term winner is the 40% bond/60% stock fund from Vanguard. Balanced
Index shows solid a 6% return since
2000 with only 0.07% cost. Or the low-cost Wellesley
Income Fund. Its allocation of 60% bonds/40% stocks has provided nearly 10%
a year since 1970. Plan 2 year, 10 year and 15+ buckets.
**********
How Govt wastes our money: Congress spends another Trillion we don’t have!
Planned Parenthood barred from doing family planning. GOP
needs more SSI kids.
Personal
Financial education wasted: need info at time of use not
ahead of time.
Trumper defies Congress subpoena: respect
for law ended by GOP? No jail time!
More
troops to Saudi and Mexico as US ready for wars again.
EPA
cancels inspections that catch polluters in the act: Koch etc donations
‘speak’
Labor
secretary worked against labor for Ford, Boeing, etc to kill protections.
SCAMS/SPINS:
Government
can’t stop Robo calls; can phone companies? For a price?
How
many times can you cry wolf? Any
credibility left?
What
happens if ObamaCare ends? Freedom
to go bankrupt: unpaid costs take savings.
NJ, NY, CT sue IRS: SALT
tax cap $10K discriminates against one group of people
Todd Ficeto, CA caught
‘pump and dump’ penny stock scheme: $200 M fraud—jail?
Henry Wieniewitz caught
selling securities w/o license 630 customers $3 M commission
People’s pain
concentrated in certain markets: solution
creates the problem
Beware: ‘Extensions’
you download may sell the info you don’t want people to have.
Beware: Financial ‘research’
is commodity like discount airline seat: cheap
buys cheap?
Jobs:
Criminal contempt of
Congress?: Barr
and Ross are NOT arrested; business as usual.
Who owns your account now?
Summit Brokerage to Cetera
Financial Group’s previous parent company, RCS Capital
Miracle:
Barefoot
woman climbs Mt Rushmore: No gear/shoes--$1000 fine but not to top
IAN
41 Watchung Plaza,
B242
973.746.2014
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