The Road to Your Investment Success
Windowofworld.com – What is the path to investment success? Blame it on Wall Street. Investors are currently facing a series of conflicting information and claims of excessive returns from what most people consider a “market” -; S&P 500 or Dow Jones Industrial Average. But this index only comprises about 12 percent of all U.S. shares. The reality is that this stock cannot be predicted with any consistency, especially long term.
In the complicated world of financial services, you are misled.
Wall Street advisors implement an “active marketing” strategy, which is a continuous development of new products that are designed and marketed as the latest and greatest solutions for investor fears and worries. There is an addiction factor that works here; Active marketing feeds our desire to roll the dice. The roll of the dice takes the form of stock picking, market timing and return chasing, activities known as active management.
The alternative is to “diversify” your portfolio with a variety of investment options and unrelated assets. This strategy allows you to own the market as a whole, not just a few components, thereby increasing your profits and reducing risk.
Based on the Nobel Prize-winning research known as Modern Portfolio Theory, the application of this theory to a well-diversified portfolio – what I call “Market Returns Portfolios” – consists of no-load institutional asset class mutual funds that you normally don’t have. ‘I don’t see many portfolios. Choices such as micro caps, international small caps, emerging markets, and stock values can cause long-term returns that are more or less consistent than the general market.
Another important aspect of proper portfolio management is finding the right company to work with. Look for ones that are independent, use a cost structure where companies are paid directly and only from clients, and use a market return approach. The right strategy, managed by the right assistance, can truly bring wealth without worry.
In some cases, worry-free investing is actually not possible. People will always worry about caring for their families and they will always worry about their country’s economy. But the real “worry-free wealth” means not having to track the daily movements of the market, saving time and energy for things that are more important in life.
Investor confidence should not be placed on their own advisory or stock selection process, but on the economic miracle we call capitalism. By tracking market movements over the past seven or eight decades, we see that the market is up more than 80 percent of the time.
The expansion of the capital market is inevitable -; and windfalls for investors on market returns.