A Tale of Two Retirements
Most people are terrible investors.
In fact, they couldn’t make money if they had tomorrow’s stock prices.
If you’re looking to read how individual investors make money, grow their retirement accounts, live the lives they dreamed about... well, forget it.
Today I’m going to give you the real low-down on the investing world... and it ain’t pretty.
But I’m also going to show you who really make money and how they do it.
It’s not hard, and there are many people with low starting capital, blue-collar jobs, and little education that are knocking the stuffing out of the market and building retirement accounts that would put to shame most six-figure earners.
These folks are making money hand over fist, year after year... and they do it effortlessly.
And they are not doing it by loading up on gold waiting for a zombie apocalypse, or buying penny stocks that will end up being duds.
In fact, if you asked them how they made their fortunes, you’d be hard-pressed to even get a smile out of them.
You see, what they do is so “matter-of-fact” that they can’t understand why everybody isn’t making money like they are.
How Bad Are They?
The data shows that most investors are terrible market timers.
When the market zigs, they zag... they are buying when they should be selling and selling when they should be buying.
Last summer when England shocked the markets by voting to pull out of the EU, investors of all stripes were caught unprepared and on the wrong side.
As the markets sold off, individual investors ran for the hills — they pulled close to $8 billion from stocks, which was one of the biggest weekly withdrawals of 2016.
Great move... right?
In less than one month, the market recovered. It went on to new highs six months later, and most of those investors missed out on the rebound and booked real losses.
In a nutshell, that is the main reason investors do so poorly: they don’t have a long-term plan, and they have the patience of a housefly.
Dalbar, a financial research firm in Boston, has been doing studies on this trend for the past 30 years, and the results always come out the same: stock fund investors make around 66% less than a simple S&P index fund!
Let's say you have two individual investors, each with $100,000 in their retirement account. One of them, Mr. Market Timer, invested in a stock fund and could buy and sell as often as he’d like. He figured he would be able to get out at tops and get back in at bottoms.
The other investor, Mr. Know Nothing, read about Charlie Munger, Warren Buffett’s partner, who advocated “sit on your ass” investing. So instead of trying to do the impossible, he simply bought a low-cost S&P 500 index fund and went off to enjoy life for the next three decades.
After 30 years, Mr. Market Timer’s $100,000 would’ve turned into $290,741.
Mr. Know Nothing did a heck of a lot better: his $100,000 turned into $1,945,680.
At retirement, Mr. Market Timer ended up working as a greeter at Walmart to supplement his Social Security check, while Mr. Know Nothing golfs three days a week and has a house off the 15th hole.
The Choice is Yours
If you are whipping the market year after year, then stop reading. This is not for you.
You got the message, and your retirement account is already in the seven digits. If so, my hat’s off to you.
In fact, I would bet dollars to donuts you’re reading this on your phone waiting to tee off, or sitting in an airport lounge about to take off for a one-week excursion to a tropical island.
But if you’re not, let me share with you how other folks are taking a very simple approach to building seven-digit retirement accounts without even listening to Wall Street.
These folks are outperforming the S&P 500... without any of Wall Street’s helpers taking fees from them!
These investors come from all walks of life... parking lot attendants, nurses, and secretaries.
They followed a simple secret that Wall Street does its best to try to dissuade you from using to make life-changing fortunes... and then they let the laws of compounding do the rest.
And this is precisely the kind of investing you NEED to check out firsthand.
So, what’s it going to be: spending your golden years working at Walmart, or enjoying yourself doing what you want, when you want, where you want?
The ball is in your court.
All my best, Charles Mizrahi Twitter: @IWPeditor Charles cut his chops on the trading floor of the New York Futures Exchange before moving on to become a wildly successful money manager on Wall Street. And with more than 35 years of recommending stocks under his belt, Charles has knocked the cover off the ball, compiling an amazing record of success and posting gain after gain for his loyal readers. He is the editor of Park Avenue Investment Club and the Insider Alert newsletters. Charles is also the author of the highly acclaimed book, Getting Started in Value Investing.
All my best,
Charles cut his chops on the trading floor of the New York Futures Exchange before moving on to become a wildly successful money manager on Wall Street.
And with more than 35 years of recommending stocks under his belt, Charles has knocked the cover off the ball, compiling an amazing record of success and posting gain after gain for his loyal readers. He is the editor of Park Avenue Investment Club and the Insider Alert newsletters.
Charles is also the author of the highly acclaimed book, Getting Started in Value Investing.