THE $13 TRILLION LIE

WHAT YOU'VE BEEN TOLD ABOUT MUTUAL FUNDS IS NOT TRUE

Posted by: Team TonyLegal Disclosure: Tony Robbins is a board member and Chief of Investor Psychology at Creative Planning, Inc., an SEC Registered Investment Advisor (RIA) with wealth managers serving all 50 states. Mr. Robbins receives compensation for serving in this capacity and based on increased business derived by Creative Planning from his services.

For years we’ve been told that mutual funds are the safe place to invest our money and expect a 12% return. But the 12% return was a myth – one that Americans currently invest $13 trillion in. The ugly truth is that you have less than a 4% chance of picking a mutual fund that matches or beats the S&P 500 index. By way of comparison, consider the game of blackjack. If you’ve ever played, you know the goal is to get as close to 21 without going over, or “busting.” If you get two face cards in blackjack (each face card equaling 10), and your inner idiot shouts, ‘Hit me!’ you have about an 8% chance of winning – double your chance of picking a mutual fund that performs better than the index.

In March of this year, Warren Buffett advised LeBron James to invest in a low-cost index fund; it is advice that Buffett follows himself. In fact, Buffett intends to provide for his wife after his passing through low-cost index funds.

David Swensen, manager of Yale’s nearly $24 billion endowment also endorsed index funds, stating, “When you look at the results on an after-tax basis, over reasonable long periods of time, there’s almost no chance that you end up beating the index fund.”

While it may seem convenient to be able to bet on an active manager, trusting in their past performance and our own intuition, the research shows that the index funds will beat it 96 times out of 100.

Team Tony

Team Tony cultivates, curates and shares Tony Robbins’ stories and core principles, to help others achieve an extraordinary life.

Source: https://www.tonyrobbins.com/wealth-lifestyle/the-13-trillion-lie/

WHEN THE SKY SEEMS TO BE FALLING

Posted by: Team Tony

Legal Disclosure: Tony Robbins is a board member and Chief of Investor Psychology at Creative Planning, Inc., an SEC Registered Investment Advisor (RIA) with wealth managers serving all 50 states. Mr. Robbins receives compensation for serving in this capacity and based on increased business derived by Creative Planning from his services.

“Global financial markets slip as oil price plunges to new lows” – The GuardianThe recent headlines about global financial markets are enough to incite panic – or at least concern:

“U.S., world stock markets slide as panic in China spreads” – The Washington Post

Volatility the new watchword for financial markets” – South China Morning Post

“S&P 500 off to worst-ever start to year” – USA Today

China’s stocks fell 11.6% the first week of the New Year, renewed tensions in the Middle East are causing the price of oil to dive, and George Soros is reporting that the current challenge reminds him of the 2008 financial crisis; all in all, it’s easy to wonder what this is going to do to your portfolio.

However, financial security is not out of reach. In fact, with the right preparation and strategy you can thrive in any economic environment. In the articles below you will find:

•    The exact portfolio of the world’s largest hedge fund leader

•    An explanation of risk in both inflation and deflation

•    A simple and effective breakdown of how to allocate your assets

•    A look into the buy-and-hold strategy

Volatile markets do not have to determine your stress level, and with the right strategy they do not have to disrupt your future plans, either. Take the time to understand these tactics and take massive action. Your future self will thank you.

Source: https://www.tonyrobbins.com/wealth-lifestyle/sky-seems-falling/

Market Numbers Through 2017 - Not Quite As Impressive As You Think

No one would deny that 2017 was a banner year for the markets... at yearend, all the equity indices were close to their all time highs. Even the WSMSI (Working Capital Model Select Income Index) had a capital growth number approaching 12%.

But, lets step around Wall Street's promotional pennants, and look at the numbers over the longterm, say this century so far...

You'll recall that the period from 1999 through 2009 was dubbed "The Dismal Decade" by a Wall Street that just couldn't cope with the idea that the "shock market" (collectively) could actually go backwards over such a long period of time.

Has the "bull market" that evolved from the dismal decade really produced the type of gains you've been hearing about?

· From 1999 through 2009, the NASDAQ (home of "FANG" type companies since forever) shrunk by a whopping 34%. From 1999 through 2017, it was the worst performing of all the indices, rising just 71%, or an average of less than 3% compounded, per year. So even the spectacular 160% market value gain since 2009 hasn't produced spectacular longterm performance.

· From 1999 through 2009, the S & P 500 (although less speculative than the NASDAQ overall) lost a scary 39% of its value. Recovering more quickly than the NASDAQ, the S & P has gained approximately 94% in market value over the past 18 years, or an average of less than 4% compounded, annually. So not so much to celebrate in the S & P either... for the longterm investor.

· From 1999 through 2017, the higher quality content DJIA suffered less than the other indices through the dismal decade, losing less than 1% per year, on average. But its 18 year, overall performance, of 115% market value growth was an average of less than 5% per year. Reflective of higher quality content, yes, but really not so impressive overall.

So what about an income purpose investing approach during the same two time periods?

· From 1999 through 2017, a $100,000 portfolio of income Closed End Funds (CEFs) paying roughly 7% per year, compounded annually, would have grown the invested capital to roughly $340,000 by the end of 2017... a 240% gain in Working Capital, and nearly three times the average longterm gain of the three equity averages!

· During the dismal decade itself, a $100,000 portfolio of income CEFs paying 7%, and compounded annually, would have grown the investment capital by roughly 111% (10% annually).

· Note that the average annual gain of roughly 13% is based on annual rather than monthly reinvestment of earnings... so it would actually be even higher. Hmmm, kinda makes you wonder, doesn't it?

Now some what ifs:

· What if you were living on the income or growth of your portfolio at any time before mid-2010?

· What if you were living on 4% of your portfolio "growth" or "total return" prior to the end of 1999, how much did you have left when the rally began in 2010?

· What if we don't get enough more years of double digit market growth for the equity markets to catch up with the income illustration above?

· What if the market doesn't produce "total return" greater than your expenditure needs forever?

· What if your portfolio contained enough income purpose securities to provide for your expenditures, combined with equity securities of a quality superior to those contained in the Dow?

· What if the stock market corrects again this year?

Buy the book

"The Brainwashing of the American Investor: The Book That Wall Street does not Want YOU to Read" outlines strategies and disciplines that could get you to a safer and more productive retirement income portfolio.

Article Source: https://EzineArticles.com/expert/Steve_Selengut/12786

Article Source: http://EzineArticles.com/9861802