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
AUD/USD: Uptrend remains capped by 0.6650
AUD/USD could not sustain the multi-session march north and faltered once again ahead of the 0.6650 region on the back of the strong rebound in the Greenback and the prevailing risk-off mood.
EUR/USD meets a tough barrier around 1.0800
The resurgence of the bid bias in the Greenback weighed on the risk-linked assets and motivated EUR/USD to retreat to the 1.0750 region after another failed attempt to retest the 1.0800 zone.
Gold eases toward $2,310 amid a better market mood
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Bitcoin price coils up for 20% climb, Standard Chartered forecasts more gains for BTC
Bitcoin (BTC) price remains devoid of directional bias, trading sideways as part of a horizontal chop. However, this may be short-lived as BTC price action consolidates in a bullish reversal pattern on the one-day time frame.
What does stagflation mean for commodity prices?
What a difference a quarter makes. The Federal Reserve rang in 2024 with a bout of optimism that inflation was coming down to their 2% target. But that optimism has now evaporated as the reality of stickier-than-expected inflation becomes more evident.
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