I will admit that owning an Index Fund is boring. However, it will get you the best return on your money.
Managers of all the other funds are constantly trying to beat the market. How many of them are actually successful? Not to many. How many can do it consistently year after year? Basically none.
The costs of actively managed funds are too high. Most index funds have very low operating fees (.09%-.20%).
I want to make a bet with everyone. Put $1000 in a index fund that follows the S&P 500. And then you buy $1000 worth of stocks or other mutual funds. I will guarantee that after 10 years the $1000 you put in the Index Fund will be worth more than the $1000 that you tired to 'beat the market' with.
Here are a few Index Funds that you might want to look into:
SSGA S&P 500 INDEX (SVSPX)
VANGUARD 500 INDEX (VFINX)
Fidelity Spartan 500 Index Investor (FSMKX)
DOW JONES WILSHIRE 5000 INDEX (WFIVX)
Keep in mind that there are many more Index Funds from basically every brokerage company. Do not pay a transaction fee for any fund. Buying loaded funds or fund with high expense ratios is not a good idea.
Friday, April 20, 2007
Wednesday, April 11, 2007
Free Credit Report
For those of you interested in getting your free credit report go here: http://www.annualcreditreport.com/
You can get your credit report from each of the three companys. Equifax, Trans Union, Experian. FREE!! Once a year.
What I would suggest you do: Every 4 months, log-on to that website chose a different company every 4 months. Doing it this way will get you 3 free reports each year!
You can get your credit report from each of the three companys. Equifax, Trans Union, Experian. FREE!! Once a year.
What I would suggest you do: Every 4 months, log-on to that website chose a different company every 4 months. Doing it this way will get you 3 free reports each year!
Monday, April 09, 2007
Interesting Cramer info...
" In February 2000, hedge-fund manager James J. Cramer proclaimed that Internet-relations companies 'are the only ones worth owning right now.' These 'winners of the new world', as he called them, 'are the only ones tat are going higher consistently in good days and bad.' Cramer even took a putshot at Graham: 'You have to throw out all of the matrices and formulas and tests that existed before the Web... If we used any of what Graham and Dodd teach us, we wouldn't have a dime under management.'"
Cramer basically ignored Grahams advice. What happened been March 2000- October 2002? Stocks lost 50.2% of their value. The dot.com crash.
Another interesting fact: http://www.thestreet.com/funds/smarter/891820.html
" Cramer's favorite stocks did not go 'high consistently in good days and bad.' By year-end 2002, one of the 10 had already gone bankrupt, and a $10,000 investment spread equally across Cramer's picks would have lost 94%, leaving you with a grand total of $597.44. Perhaps Cramer meant that his stocks would be 'winners' not in 'the new world', but in the world to come.
Follow Benjamin Grahams rules and you will do well!! Try and beat the market, and you will end up losing!
Cramer basically ignored Grahams advice. What happened been March 2000- October 2002? Stocks lost 50.2% of their value. The dot.com crash.
Another interesting fact: http://www.thestreet.com/funds/smarter/891820.html
" Cramer's favorite stocks did not go 'high consistently in good days and bad.' By year-end 2002, one of the 10 had already gone bankrupt, and a $10,000 investment spread equally across Cramer's picks would have lost 94%, leaving you with a grand total of $597.44. Perhaps Cramer meant that his stocks would be 'winners' not in 'the new world', but in the world to come.
Follow Benjamin Grahams rules and you will do well!! Try and beat the market, and you will end up losing!
Sunday, April 08, 2007
Average American household has less than $10,000 in net financial assets...
Recently I listened to the audio book, " The Millionaire Next Door." It made me think a lot about how American's spend money.
How can the average American have only $10,000 in assets, excluding home mortgage?
How can people to have incomes in the $100,000 or greater range have little to no assets?
How is it that people with incomes less than $100,000 a year millionaires?
Many Americans love status items, IE, new cars every few years. It is the perception given that if you drive a brand new BMW or Mercedes you are wealthy. However most millionaires never have spent more than $30,000 on a car, and RARELY by new vehicles.
The book describes two different types of people: UAW's ( Under accumulators of wealth) and PAW's (prodigious accumulators of wealth).
The book describes various lifestyles of people. I can already see people I know as UAW's. These UAW's get their spending habits from their parents. Did their parents get new cars every few years? Or did they drive their Toyota for 10 years, then buy another USED car and drive it for another 10 years.
This book is a must read for the avid investor.
How can the average American have only $10,000 in assets, excluding home mortgage?
How can people to have incomes in the $100,000 or greater range have little to no assets?
How is it that people with incomes less than $100,000 a year millionaires?
Many Americans love status items, IE, new cars every few years. It is the perception given that if you drive a brand new BMW or Mercedes you are wealthy. However most millionaires never have spent more than $30,000 on a car, and RARELY by new vehicles.
The book describes two different types of people: UAW's ( Under accumulators of wealth) and PAW's (prodigious accumulators of wealth).
The book describes various lifestyles of people. I can already see people I know as UAW's. These UAW's get their spending habits from their parents. Did their parents get new cars every few years? Or did they drive their Toyota for 10 years, then buy another USED car and drive it for another 10 years.
This book is a must read for the avid investor.
Saturday, March 17, 2007
Healthcare Sector
With all the baby boomers getting older, I believe healthcare stocks are going to grow rapidly in the future. Now is the time to start buying them. You'll never be able to predict which stocks will go up. There are various ETF's and Mutual Funds that invest in many healthcare companies.
If you do not like ETF's or Mutual Funds here is another option: Look at the ETF's and Mutual Funds, and see what companies they invest in. Do some research and invest in the company of your choice.
If you do not like ETF's or Mutual Funds here is another option: Look at the ETF's and Mutual Funds, and see what companies they invest in. Do some research and invest in the company of your choice.
401k or Roth 401k?
Many company's are starting to offer a Roth 401k. A Roth 401K is like a Roth IRA. You pay taxes on the money now instead of later. With a normal 401k, the money is not taxed now, and I taxed when you withdrawl the money.
Should you switch to a Roth 401k? Depends... Are you in a lower taxes bracket now then you will be when you retire? Do you think the tax rate will be increase by the time you retire. If either of those statements are true. Then the Roth 401k is for you.
I like the fact that I have already paid taxes on the money so I do not have to worry about it in the future (I'm in the lowest tax bracket also). However, you have to consider the taxes you pay now are not compounding like they would in a normal 401k.
Should you switch to a Roth 401k? Depends... Are you in a lower taxes bracket now then you will be when you retire? Do you think the tax rate will be increase by the time you retire. If either of those statements are true. Then the Roth 401k is for you.
I like the fact that I have already paid taxes on the money so I do not have to worry about it in the future (I'm in the lowest tax bracket also). However, you have to consider the taxes you pay now are not compounding like they would in a normal 401k.
Sunday, February 25, 2007
How To Save Some Extra Money
I came across an excellent tip to help you save money. This is ideal for people who have a hard time saving money or are living paycheck to paycheck.
Step #1. Open a high-yeild savings account this E-Trade, Captial One or various others. Make sure they have no fees.
Step #2. Setup that account to automatically withdrawl a certain amount each week from your checking account. Even if its just $10 a week.
Step #3. Just watch it grow.
I use an E-Trade account to put $20 a week into. The rate on E-Trades savings account is currently 5%. Now $20 a week may not sound like a lot, but it will add up over time. It is all automatic. I don't have to worry about writing them a check for $20 each week or sending them that $20 I found in my wallet. The big thing is not to use this money unless its an emergency!
Step #1. Open a high-yeild savings account this E-Trade, Captial One or various others. Make sure they have no fees.
Step #2. Setup that account to automatically withdrawl a certain amount each week from your checking account. Even if its just $10 a week.
Step #3. Just watch it grow.
I use an E-Trade account to put $20 a week into. The rate on E-Trades savings account is currently 5%. Now $20 a week may not sound like a lot, but it will add up over time. It is all automatic. I don't have to worry about writing them a check for $20 each week or sending them that $20 I found in my wallet. The big thing is not to use this money unless its an emergency!
Saturday, November 05, 2005
Well about a month ago I started a Roth IRA Account with E-Trade. Purchased a few mutual funds. We will see how it goes.
Personally I like mutual fund because you let the managers of the fund do what it best for the fund. I like the fact that I can buy it and not have to monitor it every day seeing if I should buy or sell.
Personally I like mutual fund because you let the managers of the fund do what it best for the fund. I like the fact that I can buy it and not have to monitor it every day seeing if I should buy or sell.
Subscribe to:
Posts (Atom)