Predicting The Future
Do you believe the stock market is going to average double-digit returns? Do you worry about your money going backwards in a bear market? Do you worry when the next domestic or global crisis will erupt that affects oil prices and the stock markets in a negative manner? Can you predict when the next downturn or upswing in the market will come, or when the next hurricane or earthquake will occur? Can you predict who will control the next U.S. presidency and Congress, and what fiscal, economic and tax policies they will implement, with far-reaching effects on your financial plans?
That was some mild exaggeration of uncertainties to make a point; namely, none of us knows when and how individual stocks or mutual funds will go up and down, or when the next big event will occur, affecting our actively-traded assets.
20-year returns
-Did you know that the S&P 500 stock index had overall averaged returns of 7.81% from 1992-2012?*
-Did you know that the average mutual fund investor averaged only a 3.49% return from 1992-2012?*(*DALBAR study)
Buying high and selling low
When you read the next few paragraphs, you will understand the above statistics; and many of you will be nodding your heads in agreement with a painful smile appearing on your face.
It is our opinion that over time the stock market will go up, but that we don’t really know which stocks will be the big winners, and when.
For example, won’t you agree that in July 2003, you and your financial advisor would have purchased Wal-Mart (one of the largest companies in the world, consistent earner, paid dividends) instead of K-Mart (just emerging from bankruptcy, strong marketing ties with Martha Stewart (who was looking at jail time), no anticipated dividends). How would you have done? Wal-Mart went from $56.08 to $51.76, and K-Mart went from $24.20 to $76.80.
Why did the average investor from 1992-2012 have returns of 3.49% when the average mutual fund returned 7.81%? Because we are professionals at buying high and selling low.
A better way?
Would you have been happy over the last 10-20 years with a 6-7% guaranteed rate of return on an accumulated value that would be used to pay you a guaranteed lifetime income you could never outlive? Most people would say yes. If you are interested in learning how to grow your wealth in this guaranteed manner, please click here.
No downside risk and tax-free growth and withdrawals
If you had money in the stock market over the last 20+ years, chances are significant it went backward 46% from 2000-2002, 59% from 2007-March of 2009, and up to 30% in 2020.
The bottom line is that no one can predict the future. Many people are tired of chasing returns and the next hot fund, while hoping the next stock market crash doesn’t come when they are trying to build wealth.
Highview Wealth specializes in using wealth-building tools that mitigate or eliminate risk and allow your money to grow tax-free and be removed tax-free when you are ready for retirement. To learn how you can grow wealth with the least amount of risk and in a tax-free manner, please click here.
