Money and finance is a HYPER-COMPETITIVE game. Every financial professional, life insurance agent, broker, stock-broker, fund manager, money manager, and even the government are hitting you up from every direction 24-hours per day.
ALL the professionals (and government agencies) mentioned above are looking for a competitive edge. A competitive edge with the benefits and features from their offerings, services, and plans.
The goal is to woo you, build within you a sense of confidence that you can trust them with your money – AND – help you live the dream.
Bernie Madoff, know the name?
Assuming the answer is [YES] (if the answer is [NO], can I get the directions to the cave you have been living in), the Bernie Madoff case is a double whammy;
What better than an opportunity to have a trusted friend refer you to a fund manager who’s AVERAGE gains were consistently beating the street? The SAME fund manager helping your trusted friend make money – THINK ABOUT THAT FOR A MINUTE.
The proof is in the details. Smart financial people have mastered the art of using averages to disguise bad events.
A GREAT example of this is the S&P 500.
The average annual return since adopting 500 stocks into the index in 1957 through 2018 is roughly 8% (7.96%).
If you just read the first paragraph; “The average annual return since adopting 500 stocks into the index in 1957 through 2018 is roughly 8% (7.96%)” – I WILL TAKE A STEADY 8% RETURN EVERY YEAR – NOT BAD, RIGHT?
Not bad at all, but there are a LOT of assumptions and factors built into 7.96% per year. One of them is that you had your money in the market since day 1!
Another assumption is that you had enough money – AND MORE IMPORTANTLY, TIME – to weather the storms in 2000, 2001, 2002 and 2008.
Have you heard people say; “You need to know how to time the markets?”
This is the exact game that DAY-TRADERS play. There are some good day traders, and well there are some bad ones – the bad ones either do not last very long OR they have an inexhaustible amount of capital.
The GOOD TRADERS know when to —> BUY, SELL OR HOLD
The GREAT TRADERS know when to —> LOCK IN GAINS!
Please note, there is a world of difference between “HOLDING” AND “LOCKING IN GAINS”.
“HOLDING” assumes that your money is sitting on the sidelines waiting for the next opportunity to work for you. The money on the sideline is; #1) NOT working for you and #2) will be put back to work (at risk) again in the future.
Basically, you are waiting for a new dealer because you feel the cards are running cold!!
“LOCKING IN GAINS” assumes you are permanently removing money from the pool of money working for you (at risk) in the markets – AND – you are diverting the money to a more safe and secure place that helps you protect your principal and earn a more modest gain with LITTLE or NO RISK.
Basically, you are taking money off the table and walking over to the chip counter and cashing in your winnings for CASH, and then walking around with an armed bodyguard (nobody can take your winnings!)
There ARE vehicles and tools for this! Some of the tools have “averages” and some of them have a HISTORY-OF-YEAR-OVER-YEAR-RETURNS-WITH-NO-LOSS-FOR 100+ YEARS.
Guess what, the ones with “averages” come with higher reward but carry more risk while the tools with historical returns come with modest returns and near ZERO RISK (anyone that tells you ZERO risk is lying to you!)
Subscribe below for more info and for updates on new articles – AND – thank you for reading!