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Dołączył: 16 Maj 2011
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 Wysłany: Czw 9:13, 26 Maj 2011 Temat postu: Tiffany Earrings9The Truth About Investing In Mutu |
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estors earn returns over time that are far lower than those quoted by mutual fund firms. In fact, its not even a close race.
This is the conclusion of DALBAR, Inc., the well-respected independent investment research firm, in the DALBAR 2010 Quantitative Analysis of Investor Behavior.
For the past 20 years ending December 31, 2009, the average equity investor managed to eke out an annualized return that outpaced inflation. The average return was 3.17 percent per year just slightly more than the inflation rate for that period!
Asset allocation and fixed income investors werent so lucky (if you can call that luck). They lost ground after adjusting for inflation.
Why dont most investors come close to getting the returns touted in mutual fund prospectuses? There are plenty of reasons for this. They include:
Investor Trap #1: Investors are impatient and irrational [link widoczny dla zalogowanych], and consistently make buy and sell decisions at the worst possible moments, according to DALBAR, a finding backed up by many experts in the emerging field of behavioral finance.
Investor Trap #2: You could get a 25 percent average annual return for years and still not make a single dime or even lose money! This is due to the smoke and mirrors the Wall Street illusionists have been using to pull the wool over your eyes for decades. Dont take my word for it I exposed the mutual fund rate of return myth here: /whats-the-rate-of-return-on-a-bank-on-yourself-plan.html
Investor Trap #3: If youre investing in mutual funds inside a 401(k) plan, fees can eat up to half your income over a 30-year span, according to an expos on 60 Minutes. In addition, most people arent aware that employers are making risky decisions on how to invest your money in your 401(k) for you without your knowledge or approval. And they are automatically moving your money into higher-fee funds [link widoczny dla zalogowanych], too.
This is all courtesy of the Pension Protection Act of 2006. Makes you wonder who theyre trying to protect! Knowledge is power, so I urge you to learn what the government and your employer arent telling you about your 401(k).
Investor Trap #4: Taxes [link widoczny dla zalogowanych], taxes and more taxes! Nothing Ive talked about so far takes into account the wealth-destroying effect of taxes. If youre like most Americans, much of your savings is in tax-deferred accounts, like 401(k)s. Paying taxes later is one of the big appeals of these plans. But what direction do you think tax rates will go over the long term? If, like most people, you think taxes are going to go up, and youre successful in growing a nest egg, youre only going to pay higher taxes on a larger number!
The bottom line is that most people trust their financial investments to a game with rules they do not understand and have no control over. No wonder most Americans have no confidence theyll be able to reach their financial goals and dreams.
This is why Bank On Yourself should be a part of almost everyones financial foundation. It gives you guaranteed growth in both good times and bad, as well as predictability and control.
The value of a Bank On Yourself plan goes in only one direction: up. Both your principal and gains are locked in. It gives you peace of mind for retirement planning, because you can know how much income you could take every year in retirement (guaranteed), and for how long youll be able to take it. You can take that income without tax consequences, if you do it right, under current tax law.
You can also use your cash value in the policy to inject needed capital into a business or to help you get through tough times. Whatever your long-term or short-term financial goals and dreams are, you may be surprised to find out how many of them Bank On Yourself can help you achieve.
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