|
How Does The Average Investor Perform?
by Troy Patton, CPA - Finance Geek
 Those
who get the Sunday paper know it is chock full of ads. I find myself looking at
these and wondering if there are any good deals on sale.
Most of Americans look for bargains when they shop or are compelled to buy
something on sale. It is just the opposite in the stock market.
When the market goes on sale, people sell what they have and buy when it is at
its highest peak.
At left
is a chart MorningStar used to track a high performing mutual fund. It clearly
shows how investors were adding millions of dollars to it when the stock market
was at its peak.
Then as
you can see, they pulled their money out when the market did poorly (orange is
fund return and blue is % change of dollars).
If you
were to purchase this fund at the beginning of 1997 and held it to the end of
2006 during the good times and bad, you would have returned 15.05% on average
per year.
However,
in this case the majority of the investors bought high and sold low creating a
return for the average shareholder of –1.46%. AMAZING!.
Register
for the Free Tele-Seminar on Friday
June 27 at 11:00 am ET 10am CT, 8 PT
click here to register,
This
chart tells us we should be buying and then buying more when sectors or certain
types of investing goes out of favor. Even if you bought in towards the high of
the market, the idea is to have and to hold.
Maybe
Value is out of favor today, but it will return. Maybe Growth will be out of
favor tomorrow, but it will return. The idea is to invest and stay invested. Add
to your position during decreases in the market.
No one
can predict the bottom or the top, but by staying invested and adding to
positions over time you should create returns closer to the Total Return of an
investment.
|
How to Hire A Chief
Financial Officer for your dental practice to do your monthly
books AND annual tax preparation work AND have
unlimited access for questions and answers, all without extra
charges FOR LESS than you're paying your current
accountant.
--------------------------------------------------------------
Got to:
www.pattonandassociates.com/virtualcfo.htm
--------------------------------------------------------------
Learn how to Reduce Your Tax
Liability; Maximize Your Practice Cash Flow; which Investment
Vehicles are Best For Dentists; How to Save Money on your 401(k)
Program; Should I Lease My Office Space or Buy a Commercial
Building; How to Financially Bring In An Associate; Should I use as
Section 179 Deduction -- and
more
--------------------------------------------------------------
Sponsored by Finance Geeks & Patton and Associates, LLC |
This
chart tells us we should be buying and then buying more when sectors or certain
types of investing goes out of favor. Even if you bought in towards the high of
the market, the idea is to have and to hold. Maybe Value is out of favor today,
but it will return. Maybe Growth will be out of favor tomorrow, but it will
return. The idea is to invest and stay invested. Add to your position during
decreases in the market. No one can predict the bottom or the top, but by
staying invested and adding to positions over time you should create returns
closer to the Total Return of an investment.
The opinions written within this publications are
the opinions of Troy Patton and are not intended as investment advice or an
offer or solicitation to buy or sell any securities. If you would like to
contact Troy Patton, he can be reached directly at 800-671-5872
Are you a dentist
considering or going through a divorce? Get a business valuation
before you decide to take the plunge. For a detailed explanation why,
click
here or go to:
www.pattonandassociates.com/valuation.htm
 Have
a finance question or a comment for me?
Send
it to
tony@financegeeks.com
Finance Geeks
provide unique wisdom and expert advice to healthcare professionals. Our
financial strategies help them create and maintain wealth.
|
