Investing 101

Mon, Aug 19, 2019 at 10:45AM

Investing 101

Investing, it's a scam. Not all of it, but a portion of it. My biggest problem with investment firms, they don't care about the individual. That's not how they make their money.


They make their money off of the fees. They employ people who have no fiduciary responsibility to you, without ever telling you that. You go to an investment firm and you think the financial adviser represents you.(1)(2)(3)


But it's not true. They have a fiduciary responsibility to the company that employs them. They do just enough, to keep you as a client, to make money off of their fees. Worse, they might direct you to a close ended fund, which has, okay returns.(4)
Worst case, you get an investment broker that only cares about the fees. They constantly have an excuse, on why your portfolio is under-performing.(6) Keeping you long enough, to suck you dry.(7) It's a horrible practice.(7)


Then, we have people who think they are going to be the next Buffet.(8) That's cool, but you better get into acquisitions. Buffet started in acquisitions, not stock speculation. Most of the stories you hear, about a person, starting out with a couple hundred and became a millionaire through stock investing & option trading, overnight, are usually BS.


Those guys who claim to be millionaires from speculation, always are trying to sell you something, aren't they? A book, a seminar, a web series or whatever. How do you think they really make their money? They are, modern day snake oil salesperson.(9) Selling a lie, on the back of people's hopes.


Investing is a long term game that requires patience.(10)(11) Once you understand this, investing in the market can become a wonderful tool for long term wealth growth. It's the best tool to increase your wealth and possibly become a millionaire around retirement. Especially if you started investing at an early stage in life.(12)


You don't need to be a millionaire to start. But, you just need to start somewhere. How about today? You don't even need an investment agent.(13)(14)(15)

I will help you get the information needed and we will be making money together, in no time! All you need, is a trading account.


If you have low capital, under $250 per month, no worries. There are many online brokers to meet your needs. Click here. If you have $250 or more per month, I recommend Motif Investing.(16)(17)(18)(19) All my work is based around the platform. By using the platform, you can easily invest in any of my strategies and get updates, if I change anything. Think of having someone do all the work for you, but they don't charge you a fee and you have complete control of your money. Ready to make some money?


The easiest way to grow your wealth with the least amount of effort, is throw your money in SPY. Why? The only pattern that has yet to be broken, is that the US markets pull back and then go higher. Investing in the S&P 500 (SPY), is the most conservative and probably one of the easiest ways, to grow your wealth over time. Let's take a look at the chart below.

 

Year close is what the S&P closed at on December 31st. The Annual change is the difference from the previous year. As you can see, the S&P 500 pull backs, then goes higher, pulls back, then goes higher, pulls back and then goes higher. Let's say, you invested in the S&P 500 in 2007. As we all know, the crash came.


However, by 2013, it was above it's 2007 closed. If you had dividends reinvested and were adding money when the market pulled back, you would be gobbling up shares for a discounted price. Add in compounding interest off of dividends and you would be laughing to the bank.(20)


Having dividends reinvested is extremely important. Why? Think of it this way. What happens when you push a small snowball down a hill? When you push a small snowball down a hill, it continuously picks up snow. When it reaches the bottom of the hill it is a giant snow boulder.
The snowball compounds during its travel down the hill. The bigger it gets, the more snow it packs on with each revolution. The snowball effect is a metaphor for compounding. It explains how small actions carried out over time can lead to big results. Reinvesting dividends, is the easiest way to take advantage of the “Snowball Effect”.(21)(22)(23)


Let's take a look at another chart.

 

The chart represents the DOW. As you can see, it follows the same pattern. Let's look at the NASDAQ.

 

 

Once again, same pattern. Let's look at the Russell 2000.

 

 

It's the same pattern. To build your foundation, every portfolio, needs a good foundation. We are going to look at funds, that are tied to the indexes. The S&P 500, DOW, NASDAQ and Russell 2000. I have done the work for you.

Simply hitting that invest button, will get you on your way to building a strong core. Why securities tied to the indexes is the best why to establish a core/foundation? For most investors, a portfolio of index funds is more than enough to meet their long-term financial goals. Index funds are some of the most popular, readily available, and valuable investments on the stock market. They’re also very affordable and easy to access.

But the best answer I can give you, funds tied to the DOW, S&P 500, NASDAQ and Russell 2000, is the best way to ensure long term wealth.(24)(25)(26)(27) As we just learned, the markets pull back and go higher. They always do. We are just taking advantage of that. What are you waiting for? Hit that invest button and begin you journey to wealth growth today! Don't you deserve it?

If you can, with every paycheck take 10 percent to 20 percent and put it the core Motif I have created. Have dividends reinvested and just be patient. You will be surprised how that investment will grow over time. Let compounding interest work it's magic and in 5 years, you will be saying, wow, wish I did this sooner. I know I do. Seriously, what are you waiting for? Hit that invest button and put your money to work, for you!(28)

(1) Osterland, Andrew, "Is your advisor a Fiduciary? Chances are, you have no ideaCNBC, June 17, 2015

(2) Furhmann, Ryan, “Suitability vs. Fiduciary Standards: What's the Difference?” Investopedia, June 25, 2019

(3) Hicks, Coryanne “What is a Fiduciary Financial Advisor?” U.S.News, May 21, 2018

(4) Katzeff, Paul “Want Income? Closed-End Funds Offer Yield, But Beware Of The RisksInvestor's Business Daily, May 8, 2016

(5) Voigt, Kevin, “5 Signs It's Time to Break Up With Your Financial AdvisorNerdwallet, January 10, 2019

(6) “Things Your Investment Advisor Should Never DoFamilyeducation

(7) Oliver, John “Retirement Plans: Last Week Tonight with John OliverHBO, June 13, 2016

(8) “Warren BuffettWikipedia

(9) Gandhi, Lakshmi, “A History of 'Snake Oil Salesmen'” NPR, August 26 2013

(10) Antonelli, Angela “Investing for retirement: a long-term game many workers aren't even playing” MarketWatch, February 18, 2018

(11) Reynolds, Ben “The Long-Term Investing Guide to Compounding WealthSureDividend, February 20, 2018

(12) Reinkensmeyer, Blain “5 Benefits of Investing at a Young Age” StockTrader, March 10, 2009

(13) Town, Phil “Why You Don't Need A Financial AdvisorSeekingAlpha, October 15, 2018

(14) Dahle, Jim “8 Reason You Should Be Your Own Financial AdvisorTheWhiteCoatInvestor, April 26, 2016

(15) Langager, Chad “How to Start Investing in Stocks: A Beginner's GuideInvestopedia, June 25, 2019

(16) Fintech, 8 Reasons Why The Best Online Brokerage is Motif Investing, Nanalyze, September 24, 2016

(17) “Motif Investing Review”, Investmentzen,

(18) Porter, TJ, “Can Motif Investing's Themed Protfolios Help You Reach Your Goals?Dollarsprout, April 8, 2019

(19) “2016 Disruptror 50 Full CoverageCNBC, June 7, 2016

(20) Caplinger, Dan “The Magic of Compounding InterestDividendstocksrock,

(21) Sather, Andrew “10 Reason why Compounding Interest is the 8th Wonder of the WorldEinvestingforbeginners,

(22) Hicks, Coryanne “The Ultimate Guide to Dividend StocksU.S.News, March 6, 2018

(23) Chen, James “DividendInvestopedia, May 12, 2019

(24) Nova, Annie “Warren Buffett says if you invested $10,000 in the S&P 500 in 1942, you'd have $51 million today.CNBC, February 25, 2019

(25) Perry, Mark “More evidence that it's very hard to 'beat the market' over time, 95% of finance professionals can't do itAEI, March 20, 2018

(26) Pisani, Bob “Active fund mangers trail the S&P 500 for the ninth year in a row in triumph for indexingCNBC, March 15, 2019

(27) Thune, Kent “Why Index Funds Beat Actively Managed FundsTheBalance, July 03, 2019

(28) Cladwell, Miriam “Top 3 Ways to Make Your Money Work for YouTheBalance, June 25, 2019


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