If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets you have landed at the right spot. I am a fee only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at http://www.rwinvestmentstrategies.com. If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.
Wednesday, November 14, 2012
Take a look at what we've been through, the loudest voices will say! Just over the last 10 years, we've had the tail end of the dot.com bust, the 9/11 terrorist attack that was predicted to end passenger air transportation, the housing crisis resulting from the housing market going bananas, a financial system that came within hours of going completely bust, and, to boot, Europe falling apart with the ongoing possibility of an end to the Euro. Oh yeah...I almost forgot - throw in our dysfunctional government and its never ending 3-ring circus of ineptitude.
Who would invest in this kind of a world?
Before we hyperventilate, maybe we should (gasp!) look at some numbers. Here are 10-year annualized return results for the 10 -ear period ended 9/30/12 for basic asset classes:
Barclay's U.S. Aggregate Bond Index +5.32%
Barclay's Global Aggregate Bond Index +6.45%
Barclay's U.S. Corporate High Yield Index +10.98%
JPM EMBI Global Diversified Index +11.74%
S&P 500 Index +8.01%
For the uninitiated, these are standard asset classes. Each, in fact, can easily be invested in via low-cost, well-diversified exchange traded funds. If you have a decent 401(k) or similar retirement account, you very likely have funds that track these indices available to you.
What I find interesting is that markets have done fairly well, and many don't know it. There are a lot of people walking around thinking that markets have been a total bust over the past 10 years. Here's some news: at 8%/year, your money doubles in 9 years.
Here's some more news: when markets implode, it represents an opportunity. Most everyone in the market, including retirees, has money invested that they won't need to touch for at least 10 years. What they care about is where the market will be 10 years from now. This simple realization leads smart investors to look at market downturns as opportunities to pick up really good companies at attractive prices.