Your Unbiased Advisor: Best way to start investing

What is the best way to start investing for the future?

The best way to start and continue to invest for a lifetime is a Target-Date or ‘balanced’ fund. Because we don’t know when the market will fall, we can’t time the market to get out at the right time. People who try this strategy usually lose. In fact, over time, they usually earn just 3.79% versus 11% for the ‘keep-investing’ folks. Inflation of nearly 3% reduces their buying power even further. Why does this happen? Most of us take the short view; not the long view with our savings/investing dollar. If our quarterly statement account shows a loss, we opt out of the long-term 11% return. We can ride out a market fall by using a balanced fund like the low-cost Wellesley Income Fund. Its allocation of 60% bonds/40% stocks has provided nearly 10% a year since 1970. So even when stocks fell 37% in 2008, this fund had less of a ‘statement’ loss to overcome. Also, some folks seem to think that when the market falls 37% they actually lose 37% of their money. If you don’t sell, your fund holds the same number of shares so when the shares rose 27% and 32% as in 2009 and 2013, your account value still maintain the 10% a year over time. Stay invested for more: https://www.amazon.com/Millionaire-Mutual-Funds-Save-taxes/dp/1534939490

Are women better investors than men?

Studies show that women are willing to wait for their accumulations to grow. Patience pays, according to Warren Buffett. When women in one study worked with woman advisors, they held less cash and considered themselves to be more risk tolerant than men. Consequently, their returns were higher. Among the participants, those working with an advisor had a cash allocation almost 15% lower than those with no professional financial advice. However, when female investors worked with male advisors, two-thirds of this affect was offset. The data parallels the experience of master investor, Warren Buffett. Recently, he won his bet with a hedge fund manager using 5 different strategies. Buffett bet $1 million that a simple low-cost index fund (Vanguard 500 Index fund) would outperform stock-picking investing. DALBAR keeps track of investor returns and has shown that over time, a low-cost index wins: No trading, no market timing, and no chasing earnings. In each period, advisor-managed accounts earned less than ‘buy and hold’ investors: 3.79% versus 11%. Wall Street is wrong.

Learn patience: https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963

How much can your money earn without you?

Do you expect your money to work for a living? If not, you are losing the largest potential earnings available. Fidelity looked at its most successful investment accounts. Guess what? The most successful accounts were owned by people who died or who forgot they had them. Lesson: don’t pay anyone to ‘manage’ your accounts. How can this be true? Warren Buffett the greatest investor of our time says his success is from ‘compounding.’ If we leave our stock/bond account alone, it will earn money by itself. We do nothing! For example: Invest $250 a month in Buffett’s recommended account and 33 years later you have about $993,000. You invested $99,000 (3,000 x 33 years). Your money earned $894,400. You did NOTHING but allow $250/month to work!

Let compounding work: https://www.amazon.com/Miracle-Compounding-Turn-day-into/dp/1470176513

When Fed rates fall, retirees need inflation-buster

If you rely on ‘high’ savings rates to float your retirement income then you better plunge into 2.5% paper now. However, with inflation running at over 2%, you are losing your purchasing power. All your costs are going up and your earnings down. What to do? The answer is having enough for expenses now and growing your assets for the future. You must bust inflation wide open or your future income is in jeopardy. How can you do that safely? A little risk goes a long way. Think of it this way: part of your assets are for 2 years out and part for 10 years out and part for 15+ years out. Don’t think that all your assets will be needed at the same time. You can afford a little risk with those 15 year assets. Your 2.5% works for now but won’t cut it for later. For later, a balanced fund is best. A long-term winner is the 40% bond/60% stock fund from Vanguard. Balanced Index shows solid a 6% return since 2000 with only 0.07% cost. Or the low-cost Wellesley Income Fund. Its allocation of 60% bonds/40% stocks has provided nearly 10% a year since 1970. Plan 2 year, 10 year and 15+ buckets.

Best Deal: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

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How Govt wastes our money: Congress spends another Trillion we don’t have!

Planned Parenthood barred from doing family planning. GOP needs more SSI kids.

Personal Financial education wasted: need info at time of use not ahead of time.

Trumper defies Congress subpoena: respect for law ended by GOP? No jail time!

More troops to Saudi and Mexico as US ready for wars again.

EPA cancels inspections that catch polluters in the act: Koch etc donations ‘speak’

Labor secretary worked against labor for Ford, Boeing, etc to kill protections.

SCAMS/SPINS:

Government can’t stop Robo calls; can phone companies? For a price?

How many times can you cry wolf? Any credibility left?