This information WILL NOT BE GOOD FOREVER, yet there are some timeless lessons we can all draw from set specific market statistics above. I.e. there will ALWAYS be a wide range of market performances.
The word ‘security’ in the image headline is in quotes because it’s tough to call some of these secure; however, they do occasionally lure traders and investors to the depths of despair.
We just went ahead and picked out a few names in the market to put a ‘face’ to the relative category of performance as it relates to the US Dollar. We’re not trying to beat up on Hertz (down over 90% YTD) and General Electric (down 40% YTD). We’re certainly not saying these are bad investments, because past performance is not indicative of future performance.
We are implying you may be able to change your own performance by aligning yourself with consistent outperformers. This could be BIG for you.
There are three timeless lessons we can pull from this image to help explain the markets.
Stocks, cryptocurrencies and ‘designed systems’ fluctuate much more than world currencies and bonds. You can see it, right in the middle of the chart, the British pound, the US dollar and the Euro didn’t move much (but they did move). Hertz and GE got crushed, and Bitcoin and TIP’s Optimum Strategy ® killed it.
Most companies lose money in any given time.
62% of all publicly traded tickers on the market have lost money year-to-date (YTD), almost nine months in.
23% are down 30% or more.
9% have lost MORE THAN HALF.
This means, by randomly selecting a ticker to invest on Jan 1st, 2020, there is a 9% chance you lost half your money so far this year. But what happens if you stretch the timeline out over long enough, say 10 years?
According to Forbes, after one decade of investing in the stock indices, you have a 90% chance you will outperform bonds.
We did some independent research for you on government securities available to government workers in their retirement accounts (TSP’s). What we discovered was, the ‘C’ fund (common stocks) outperformed the ‘G’ fund (government bonds) over any twelve-year period since inception (43 years ago as of Sep 2020).
Even buying at the very peak of the dot com bubble, in roughly11 years, you would have better performance if you remained invested in stocks.
It’s also important to realize, mutual funds are just a mixture of stocks and bonds. 96% of mutual funds underperform the broad market, because usually they have a percentage of bonds. There are also higher management fees associated with mutual funds, so it’s important to ask your Advisor about these fees.
You can look up your mutual fund percentage breakdown of stocks versus bonds on sites like Seeking Alpha to quantify exactly how much money you’re losing every year by staying invested in a mutual fund that is invested partly in bonds.
A lot of funds are half stocks, half bonds, and claim to be a ‘safer’ investment. If you have over 12 years, it’s not. This is why the average annualized mutual fund returns are about 5.5%. The average annualized returns of the overall indices is nearly DOUBLE that.
IF you have no idea what you’re doing, AND you plan to invest for more than 11 years, just invest in the stock indexes. Forget mutual funds, you’re losing money to bonds and fees.
Outperformers are more likely to continue to outperform because their values and integrity are inherently different. Stick to the only the best and you’d be surprised where they take you.
Do you want to crack the code of the markets and figure out how and why things are moving the way they are?
Let us help you understand investing and tap into extra passive income today so you can retire early and get what you really want life.
The catch is, to see results, you have to make the change. That’s how you can start the compound interest effect today and end up with 2,5 or even 100x more money when you retire.