Brandon Wendell, CMT
Brandon Wendell
The majority of investors blindly follow the “conventional wisdom” and the easiest path to investing. This usually includes placing their money into a 401k and or mutual funds in their IRA. They either don’t know there is a better alternative or worse, they don’t care.
Morningstar reports the average mutual fund returns for the past few years. At face value they seem as though they are doing their job in increasing your funds for retirement. But just compare the returns to that of the market itself and you see where you will be falling short of your financial goals.
Morningstar also reported that in March 2014, investors added $39 billion to equity funds.
Looking at the S&P 500 as a benchmark, if you simply invested in the market itself, you would have had returns of 45.5% over the past three years. Clearly the fund managers are not doing better than you could yourself!
Paraphrasing Warren Buffet, he once said the best way for an individual investor to be involved in the market is with an index fund. An index fund is one that mirrors the broad market index and usually has lower fees. While this is probably good advice, it doesn’t address the issue of avoiding large market crashes like we experienced in 2000 and 2008. Many people fear that it is not an issue of “if” but rather when it will happen again.
There is also the issue of flexibility. When you are investing in a fund, you generally can only redeem, (sell) your shares after the market has closed. When you are trying to time entries and exits, this can reduce returns. So an alternative is the use of ETF’s in your retirement accounts. An ETF is a passively managed basket of stocks in which you buy shares of the basket. It mimics the underlying index but allows an investor to enter or exit the fund whenever the market is open.
For instance, the SPY, (the ETF that tracks the S&P 500 index) returned over 55% in the past three years.
What if you could bolster your returns with only a few hours of work per month? In Online Trading Academy’s ProActive Investor Course, students learn how to potentially increase their returns using simple techniques.
So with the right knowledge and skills, nearly anyone can supercharge their retirement accounts using Market Timing Techniques developed and taught by Online Trading Academy. Stop accepting mediocre returns for your financial future. Learn how to get the stellar returns you need to have the healthy and happy life you deserve.
Neither Freedom Management Partners nor any of its personnel are registered broker-dealers or investment advisers. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk. Also, Freedom Management Partners’ personnel are not subject to trading restrictions. I and others at Freedom Management Partners could have a position in a security or initiate a position in a security at any time.
Editors’ Picks
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates
Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.
GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
USD/JPY gathers strength to near 157.50 as Takaichi’s party wins snap elections
The USD/JPY pair attracts some buyers to around 157.45 during the early Asian session on Monday. The Japanese Yen weakens against the US Dollar after Japan’s ruling Liberal Democratic Party won an outright majority in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi.
Editors’ Picks
USD/JPY gathers strength to near 157.50 as Takaichi’s party wins snap elections
The USD/JPY pair attracts some buyers to around 157.45 during the early Asian session on Monday. The Japanese Yen weakens against the US Dollar after Japan’s ruling Liberal Democratic Party won an outright majority in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi.
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates
Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.
Gold: Volatility persists in commodity space
After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.
Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms
US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
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