Saturday, November 22, 2008
Don't Drink it's Poison!!!
21 Year Returns on the SP 500..."Dump it All in the S&P 500...you are a guaranteed winner in 25 years!!!"That's the advice one of the pundits gave viewers on Fox News Taking Stock... One investor calculated the return on an invesment if he would have Dollar Cost Averaged 1 share of the S&P 500 since 1987. "During that time, I would have purchased 251 "shares" of the S&P 500 and I would have spent a total of $215,301.93 purchasing those "shares." On November 20, 2008, the S&P 500 closed at $752.41. That means my 251 "shares" would have been worth $188,854.91. That equates to a net LOSS of $26,447.02. The return on my investment would have been a NEGATIVE 12.28% for the past 21 years."
If one did not get their fill of hemlock from the 21 year return, then look at what has happened over the last 10 years. That is when I was first approached by a "Fianancial Advisor" . After all, what the heck did I know? After a year of investing with American Funds, I shifted gears to another company that did even worse for me. Finally, I started investing in Vanguard Funds which are for the ivdividual investor. Still, I only received marginal gains. It was only after I started following the markets that I made a few well placed investments, which made my 403 B plan a winner. When I saw the looming market meltdown, that money was moved into T-Bills that are currently yielding approximately 1.3% interest... which sure as heck beats the DRUBBING most others have taken on their retirement accounts. As of the fist of the year, I am contemplating whether I should be putting any money into a 403B Plan. I am certain I can beat whatever their return is... plus that money is tied up FOR-EV-ER! Remember folks, no one will take care of your money like you will!
10 Year Returns on the SP 500
"If I would have started investing on the last trading day of November 1998, I would now own 120 S&P 500 "shares." I would have spent $147,544.63 for those 120 shares. The value of my portfolio on November 20, 2008 would have been $90,289.20 giving me a net LOSS of $57,255.43 and the return on my investment would be a NEGATIVE 38.81%."
DO YOU NEED MORE EVIDENCE?
I sent a letter to one of the fellows who were combing the halls looking for news 403B investors. I am certain he did not expect a series of questions that he got from me. I am positive that the response was just about as evasive as the high pressure salesmen on TV...
Brian: How are your funds performing?
Advisor: I typically use the 403(b)7 mutual
fund accounts for my clients. Overall, the funds are down.
Brian: Could you please indicate what your best performing fund is year to
Advisor: U.S. Gov. security fund or Fixed accounts
Brian: Do you believe that buy and hold strategies are a good decision?
Advisor: I believe it is a good idea if one is diversified. Most people buy and
sell at the wrong times which drives down long-term performance in ones
Brian: Does dollar cost averaging always make sense?
Advisor: Depends on your time frame and what the money is needed for.
Brian: If I would have invested $100,000.00 with you last January, would I
be up right now?
Advisor: Mutual funds, NO. Fixed strategy and some bonds, Yes
I've been handling my own investing for a while now... but I am always
open to solid financial advise!
Look for trends, and follow them!!! Consider getting long on Gold... Find companies that are under stress in the current financial crisis... Last, bottom fishing could be hazzardous to your investment health... The only place I have lost this year has been on the call side of transactions... More to follow!!!
Tom Sesny Letter On 20 and 10 years Returns
Converation with Financial Advisor
Posted by at 1:26 PM