Retirement Planning Consultants
Confused, overwhelmed, disappointed with the
investment process and dont know where to begin?
As you may have discovered, investing isnt all that fun
for the average investor. What options
do you have?
You can do it on your own. But, how good are you on picking from tens
of thousands of stocks, bonds and mutual funds that are available?
One financial writer calculated that if you stay up on
the news in the press, magazines, online and cable, you'll be exposed to at
least 42,000 "tips" every year from pundits and ads. How do you sift through all of that
confusing information?
What do you --- the average investor, need to know
about saving - investing for retirement?
There are no investment gurus. A magic formula that will help you to build
your nest egg does not exist.
History shows us that the experts that you see on TV or
read about in print cannot produce above-average returns on a regular
basis. But, they will charge high fees
and expenses that will under perform a totally unmanaged index mutual fund a
fund that charges low expenses and just buys and holds all or a representative
sample of all of the stocks in a broad stock market index.
More than a hundred years of academic research has
concluded that index funds are an investors best investment. Why?
Studies have repeatedly shown that over the long haul,
index funds perform better than thousands of other competing mutual fund.
Index funds have regularly produced rates of return
exceeding those of active managers by close to 2 percentage points. The reason?
Management fees and trading costs.
They are cost efficient.
Funds that mimic indexes always
have lower fees and expenses because of their passive investment style. You dont have to pay high priced managers
of actively managed funds to pick stocks for the fund.
The expense ratio of the average index fund is below
0.2%. The expense ratio for an actively
managed fund is 1.52%. Research on
mutual fund performance shows that
paying above average expenses makes above-average performance less
likely.
Expenses dont enhance performance. They erode it. Every $1 dollar you pay or lose now costs
you not only that $1 but also the amount that $1 could earn over your
lifetime.
Returns from index funds are predictable. They do not prevent losses when the market
declines but you know beyond doubt that you will earn the rate of return
provided by the stock market. With index funds, you capture the entire return
of each asset class.
By using index funds, you use a simple, time-tested,
low-cost, easy-to-understand, do-it-yourself, low-stress, uncomplicated
approach to building your nest egg.
Your low maintenance
portfolio does not require worrying
about your investments on a day-to-day basis.
The S&P 500 Index outperformed almost two-thirds of
large-cap active funds in the five years through 2005. The S&P Mid-cap 400 index bested 81% of
mid-cap managers and the S&P
SmallCap 600 topped 72% of small-cap
manaagers.
Whats the difference? Actively Managed Funds or Passive Index
Funds?
In an actively
managed fund, the manager
will try to pick individual securities (stocks and bonds) that will perform
better than the market.
However, beating the market is due to luck not a skill
that is repeatable. Studies show that
only about 3 percent of active managers beat an appropriate index over a ten
year or longer period. It is nearly
impossible to predict which manager will get lucky and beat the market. Investors who have been lucky in the past
should not expect a continuation of their good fortune in the future.
Passively
managed index funds do not attempt
to beat the market. They will seek to match the returns of a
specific stock benchmark or index by
buying representative amounts of each security in the index
In a 2004 report on investment behavior, Dalbar Inc, a
financial-services research firm, found
that over a 20 year period, the average equity investor earned 2.57% annually
, compared to 3.14% inflation and the S&P 500 index investor earned 12.22%
over that same period. The gap between the average active investor and the
market is 9.65% a year.
Saving Investing For Retirement- A Simple Approach That Works
An easy, step-by-step, time-tested process for
building your retirement
nest egg.
.
Presents:
A Brand New Workshop
