Securities Returns Can Be Misleading

                    

Stock potential:

They have been said to return about 7% above the rate of inflation for the past two hundred years. And in twenty year periods, they have supposedly outperformed bonds about 90% of the time.

But that figure is misleading. These statistics conceal important facts. Someone who had invested at the market peak in 1929 would have had to wait until 1998 to reach a return of 10% on their money. (That would include dividends.) This is an after-inflation yearly return of 7%. Actual returns will differ greatly, depending on the time you actually begin investing in the market.

                       

An S & P 500 investor from 1929 through 1949 received an after-inflation return of about 4.5%. An S & P 500 investor starting in 1932, and holding on until 1951, received an after-inflation annual return of about 10.8%. That works out to over 6% more per year. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

Disciplined Strategy Usage

                

The Dow Industrial Average contains some of the largest, soundest companies, and cannot be considered speculative. Yet, the market is highly volatile. Thus, added pressures exist for tempting frequent buying and selling.

                       

This may be great for professionals who make up 80% and more of the market, but it can be disastrous for average investors subject to the influences that induce market timing.

                       

The solution? Disciplined strategy that I often describe.(See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

Your Investment Odds

                  

My aim has always been to increase the odds of success for all investors. Investing need not be a toss-up game where an investor has to outsmart someone else in order to win more often than not.

All you need for investment success are better odds, not sure-fire future winners.

                       

What is therefore needed to accomplish all that is a special discipline. That means a strict avoidance of the media and Wall Street/financial industry distractions and noise. The latter constantly bombard the investor from all sides.

                       

Knowing why and how to avoid  distractions, along with how to cope in the jungle-like investment environment, are the key to investment success.(See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

               

Disciplined Investment Strategies

                  

Investment strategies should be tailored to individual preferences and needs. What tips the odds for each investor is the discipline employed in the use of strategy. Every investor has built into the purpose for the purchase of a security, the reason to sell it. Discipline from the original intent guides that sale.

                                           

Most importantly, strategies cannot be intermingled. You sell a stock when the purpose for which you bought it no longer holds. But there must have been only one purpose. If it was excellent earnings growth and that stopped, then sell.

                       

Low price earnings is too vague and variable, to be a disciplined strategy.(See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

Reported Investment Gains

                

The financial media often report on big winnings made by some of the financial operators and hedge funds as if following them is instructive for the average investor

                       

However, the average investor does not have the funds, nor credit to emulate what big investors and hedge funds attempt in the markets.

                       

The ability to borrow the necessary capital would be impossible on the terms needed. Professionals have access to the multi-millions in credit.

                       

It makes for entertainment for most investors who read or tune in. But it does something else. It poorly educates the mass public about financial strategy. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

Lack of Media Advice on Age Risk

              

There is always considerable risk in taking media investment advice. One of the reasons: it’s invariably offered to all without qualifying distinctions, whether you be a professional or ordinary investor. The same to folks in their 80s and 90s as well as 20 and 30s.

                       

Read between the lines carefully, as the information most likely will not apply to your age level. Nor, for that matter, your level of risk accommodation. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

                   

               

Need Investor Advisers?

                

Investment advisers often show stupidity that goes far beyond investment risk, when they boast of their advantages on behalf of clients.

                                                   

Because no one with a modicum of investment intelligence should have to rely on an investment adviser.

                       

Example: Paying an adviser 11⁄2 to 2% or more of your assets as a minimum charge can represent as much as 15%, 20% and much more of your annual investment income. That’s outright foolish; you will be receiving little practical advice in return.

Unless you have never heard of unmanaged, indexed mutual funds or ETFS, what sense does it make losing that much of your investment income every year to an adviser who’s of little help? (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)