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This newsletter provides articles each week that are of interest to traders in the financial markets. As of today, we are also including articles about long-term investing. Our intention is to fill a need for information on building wealth for retirement, with lower risk and higher returns than the conventional methods.

Most investment information available elsewhere comes from the companies looking to induce investors to buy their funds, annuities, or other investment products. Our only product is education, and we have no bias with respect to any particular investment vehicle.

What we do have is decades of experience in both trading and investing, and a straightforward, rule-based investing strategy. Its purpose is to create a program with the combination of protection, growth, and cash flow that is tailored to each investor, at any stage of life – and that includes you!

We call our students Proactive Investors. As the name indicates, our method involves something other than simply buying and holding stocks or mutual funds.

The Proactive method has just a few building blocks. The first one of these is to avoid having your investment funds eaten up by unnecessary fees.

People are often surprised at just how big an issue this is, and even more surprised to learn that there is something that they can do about it.

The first hurdle is sales commissions. If you buy an investment through a provider such as a financial advisor, insurance agent or broker, there is a high likelihood that the provider receives an immediate commission. These can range up to ten percent of your principal for certain products. This is just like starting off your new investment with a 10% loss on the first day. If you bought $100,000 worth of stock on Monday, and by Tuesday the account balance was down to $90,000, you would not be happy. Yet that is the exact situation with many investment products.

Nickel-and-diming is expensive where there a lot of nickels involved. And it doesn’t stop with the sales commission.

Here are some other fees that are routinely charged on various investments. Some of these fees are disclosed in prospectuses if you read the fine print, and some are not:
 

  • Back-end mutual fund sales commissions, where you may pay as you exit, of 1 to 4%
  • Ongoing sales commissions of a fraction of a percent every year, typically ¼%
  • Management fees bled off your account every year, from a fraction of a percent to 2% or more
  • Caps on variable annuity returns that insure that even if the market has a great year, you probably don’t
  • Hidden differences between a fixed annuity payment rate you are quoted and the real ROI
  • And a host of others

What all of these fees have in common is that they sap your returns in return for “services” of dubious value.

One of the first steps any investor should take is to assess the investments they currently have and understand how much they are paying in fees, and for what. If your current investments are in standard mutual funds, hedge funds, fixed or variable annuities, variable life insurance policies, managed accounts or wrap accounts, and many kinds of predefined IRA investments, you will almost certainly be unpleasantly surprised.

The good news is that there are investments, available to everyone, that do not involve these levels of fees, and in fact barely have any fees at all. They allow any investor to participate in the markets for stocks, bonds, precious metals, commodities and foreign exchange, as appropriate for the investor, rather than for an advisor, all at very low cost.

You may have worked out by now that one of the types of investment vehicle I’m describing is the exchange-traded fund, or ETF. Used in combination with other vehicles, and wielded with the right strategy, ETFs can be a key tool for investment success.

The exact selection of ETFs along with other tools to be used, will be individual to every investor, and the Proactive Investor Course teaches this in detail. But this first basic principal is common to all:
 

  • Do use low-fee instruments exclusively.
  • Do not pay investment fees that you don’t have to.


That’s all we have space for today, and that is just step one. More to come in future weeks.

 

 

 


 

 

 

 

Learn to Trade Now

This content is intended to provide educational information only. This information should not be construed as individual or customized legal, tax, financial or investment services. As each individual's situation is unique, a qualified professional should be consulted before making legal, tax, financial and investment decisions. The educational information provided in this article does not comprise any course or a part of any course that may be used as an educational credit for any certification purpose and will not prepare any User to be accredited for any licenses in any industry and will not prepare any User to get a job. Reproduced by permission from OTAcademy.com click here for Terms of Use: https://www.otacademy.com/about/terms

Editors’ Picks

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips.  Fed Chair Jerome Powell set to speak ahead of the weekly close.

EUR/USD News

GBP/USD hovers around 1.2620 in dull trading

GBP/USD hovers around 1.2620 in dull trading

GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.

GBP/USD News

USD/JPY sticks to 151.40 amid BoJ’s cautious approach regarding monetary conditions

USD/JPY sticks to 151.40 amid BoJ’s cautious approach regarding monetary conditions

USD/JPY struggles as BoJ’s cautious approach to keep monetary conditions accommodative. Japanese CPI (YoY) rose 2.6% in March, from the previous reading of a 2.5% rise. The strength of the US Dollar is bolstered by hawkish statements from Fed officials.

USD/JPY News

Editors’ Picks

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips.  Fed Chair Jerome Powell set to speak ahead of the weekly close.

EUR/USD News

GBP/USD hovers around 1.2620 in dull trading

GBP/USD hovers around 1.2620 in dull trading

GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.

GBP/USD News

Gold price sits at all-time highs above $2,230

Gold price sits at all-time highs above $2,230

Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

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