Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes! - 30th Jul 21
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory - 30th Jul 21
Gold and Silver Precious Metals Technical Analysis - 30th Jul 21
The Inadvertent Debt/Inflation Trap – Is It Time for the Stock Market To Face The Music? - 30th Jul 21
Fed Stocks Nothingburger, Dollar Lower, Focus on GDP, PCE - 30th Jul 21
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
WEALTH INEQUALITY WASN'T BY HAPPENSTANCE! - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How to Beat the Market

InvestorEducation / Learning to Invest Apr 25, 2013 - 04:37 PM GMT

By: Investment_U

InvestorEducation

Marc Lichtenfeld writes: As I write this, we have a house full of my daughter’s friends for a sleepover birthday party. Despite the nonstop chattering (and shrieking), I still have no idea what 9-year-old girls talk about. I assume the main topics were puppies and Justin Bieber.

All I know is I have two jobs for the party. 1) Make my famous baked ziti. 2) Go upstairs and remain unseen for the rest of the evening.


I handle both with incredible skill.

But there is one other important responsibility I undertake every year around my daughter’s birthday. I invest for her education.

When she was born, I did what a lot of sleep-deprived parents do. I put her money into mutual funds, expecting the professional money managers to beat the market and generate a strong return.

But as the fog of sleep deprivation cleared, I realized I can do a better job than the so-called pros.

Over the past 10 years, 48% of mutual fund managers beat the S&P 500 or their specific benchmark. Last year… just 39% hit their mark.

So in any given year, mutual funds offer less than a 50% chance of outperforming the overall market. That means you have better odds of success if you simply buy the SPDR S&P 500 ETF (NYSE: SPY) and forget about it.

You Can Win
Any investor can beat the pros for a few simple reasons:

•Fees – When you invest in a mutual fund, you pay management fees. The average mutual fund charges 0.81% in annual expenses (some are much higher). It may not sound like much, but go 10 years without paying fees and you’ll have 8% more money.
•Performance anxiety – Fund managers are under pressure to beat the benchmarks so the folks in their marketing department can brag about market-beating returns in their advertising. That forces the managers to make short-term decisions that hamper long-term performance.
•No one cares more about your money than you – It is one of Investment U Chief Investment Strategist Alexander Green’s favorite sayings, and it’s absolutely true. Only you will manage your money in the way that is most suitable for your needs.
•Flexibility – Fund managers have millions of dollars they must put to work. So they often can’t invest in smaller companies without blowing share prices out of the water. As an individual investor, you can invest a few thousand dollars into even the smallest names and almost always get the price you want.How to Beat the Pros

It couldn’t be simpler (or cheaper) to beat the pros. If you use one of my favorite strategies, your returns will be the strongest amongst all your friends, and, best of all, this tactic has proven itself over decades in all kinds of market environments.

Again, it’s simple… Buy stocks that raise their dividends every year.

These stocks typically outperform the market. Even better, they put more money in your pocket every year.

For example, Air Products & Chemicals (NYSE: APD) has raised its dividend every year for 31 years. Over the past 10 years, the average annual raise has been 11.8%. The most recent dividend hike was 12.1%.

Those figures have led to some serious outperformance.

Over the past 10 years, Air Products beat the S&P 500 by 45%. In other words, if you invested $10,000 in Air Products a decade ago, you’d have $25,200 today. If you stuck with the S&P 500, you’d have just $20,700.

Believe me, I’m not cherry-picking Air Products.

Since 2003, the S&P Dividend Aristocrat Index, which consists of S&P 500 stocks that have raised their dividend every year for 25 years or more, has beaten the S&P 500 by an average of 71% over rolling 10-year periods (1994-2003, 1995-2004, etc.).

Better yet, even during the index’s worst period, it still beat the broader market by 50%.

Even in the short term, Aristocrats outperform the market, beating the S&P 500 in 17 of the past 23 years on a one-year basis. The average outperformance was over 4% per year.

And the best part is there are no management fees eating into your profits. You actually keep all the money you make. If you use a discount broker, you pay $7-$10 for your trade and then it never costs you another dime until you sell.

The strategy is simple, cheap and, most importantly, it works.

Get your hands on dividend raisers and you’ll be as good as I am at securing my children’s future. But as far as my baked ziti is concerned, you don’t have a chance.

Their plates were all clean.

Good investing,

Marc

Beat the Market, 4.5 out of 5 based on 2 ratings

Source: http://www.investmentu.com/2013/April/how-to-beat-the-market.html

http://www.investmentu.com

Copyright © 1999 - 2011 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in