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My aunt used to be my financial advisor… until I fired her.
She worked at one of the big name, reputable (so they say) investment firms. She invested my money in well known companies. Companies the hot-shot analysts at her company said were awesome companies to invest it.
And some of them actually performed really well. Others sucked it up pretty bad.
Which is about par for the course when investing.
A Closer Look At The Quarterly Statements
For a while, I thought things were going okay. But each month I got my quarterly statements and something stuck in my craw.
It was all those transaction fees from buying/selling the stocks in my account. And, on top of that, was the management fee I got hit with each quarter. Basically a percentage of assets under management she and her firm charged me to manage my account.
Now, like Ron Swanson, I believe people should get paid for the services they provide. But I noticed something deeply disturbing when I looked more closely at the numbers…
My overall returns were pretty much in line with how the overall stock market was performing. But when you factored in the transaction and management fees, my money was doing WORSE than the market as a whole.
Did I fire my aunt as soon as I realized this? No. Cuz family and whatever.
But after seething over a few more quarterly statements, I broke.
I canned her, took control of my own financial future, and have never looked back.
A Stoopid Simple Investment Strategy
My experience is pretty typical. Now, maybe it’s not with family. But the vast majority of investors pay financial advisors, fund managers and other supposedly “rock star” financial types high fees for the promise of high returns.
But the stark reality is that most of those financial types underperform the market over time. And once you pile their fees on top of things, forget about it. You’d have better luck finding an honest politician than one of these clowns outperforming the market with your money.
The truth is, you don’t need a financial advisor to handle your investments for you. There’s a tried and true, simple investment strategy that’ll outperform the VAST majority of money managers.
Ready for it? I’ll give it to you step by step. Here goes…
Step 1: Open an account with a reputable online brokerage firm.
Step 2: Regularly invest your money in an index fund or ETF that tracks the S&P 500 index.
That’s it. You’re done.
Stoopid simple, right?
Yep, that’s all it takes to TROUNCE most financial advisors when it comes to investment returns.
Wanna make things more complicated?
Diversify a little.
Invest some money in an index fund or ETF that tracks the Russell 2000 Index of small cap stocks. Or one that invests in bonds.
You can make it as complex or simple as you want.
But you want to fire your investment advisor, keep the money you’d pay them in fees to yourself and likely outperform them over the long haul? Then just follow that 2 step simple investment strategy above.
You’re welcome!
