Stocks

Failing Funds

BrandonWendell
Brandon Wendell
Instructor, CMT

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

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!

bwendell 20140422 - spx 3 year

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.

bwendell 20140422 - spy 3 year

What if you could bolster your returns by investing only a few hours per month?  In Online Trading Academy’s ProActive Investor Course, students learn how to potentially increase their returns using simple techniques.

proactive

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.

Brandon Wendell
bwendell@tradingacademy.com

Disclaimer
This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.