Do you think that with stock market going up, there will be a turn around in eco

    
    
Do you think that with stock market going up, there will be a turn around in economy?

When the market is down or up and down, the fees you pay for investing matter even more. People using financial advisors pay a lot of money and get much worse returns than people that do their own investing.

%26quot;the BCT study found that the raw returns of equally weighted mutual funds (net of all expenses) for 1996 to 2002 were 6.626% for the investors working on their own and were 2.924% for funds provided by advisors.

In other words, the public working on its own did more than 100% better than financial advisors when it came to selecting equity mutual funds. After factoring in inflation and
taxes, clients of financial advisors lost money and lost purchasing power.%26quot;

DIY - But learn to invest the proper way:

1. Do not chase past returns. People that buy funds because they have done well in the past are doing exactly that.



2. Do not market time. Market timing is buying based on your (or your newsletter, or your TV, or neighbor%26#039;s) guess about what is going to happen in the future. Even if someone knows something, you%26#039;ve already missed the boat. The price already reflects what you just found out.



3. Use index funds. Over time, index funds outperform actively managed funds, mostly because they do not have those high expense ratios. Some actively managed funds do beat their index, but the ones that do usually do not do so consistently. So why gamble? Use index funds. If you want to use a few actively managed funds, make sure that the costs are very low. Vanguard has some good ones.



4. Diversify. Don%26#039;t put all your eggs in one basket. Own a mix of bonds, domestic equities (large, small and mid cap funds), an international fund and perhaps a REIT (Real Estate Investment Trust) and emerging market fund. Four to six funds is all you need.



5. Consider taxes. Use the least tax efficient funds in your tax-deferred accounts and the most tax efficient funds in your taxable accounts. http://trendfollowing.com/whitepaper/The...
Asker's Rating:
very complete

Other Answers (6)

  • Let%26#039;s see...they issued those BAD mortgage loans between the years 2002 - 2006. They started to RE-adjust their % rate in 2007 which begain the major forclosures.
    So...if they issued the loans for 5 years then it will take 5 years for them all to adjust.

    In short...unless Congress steps in and saves them, I do not see any major turn around until sometime in late late 2010 to late 2011. By then we should either be approching the end OR Congress will have interveened by then!

    Later,
    -s7lmb
  • It%26#039;s going to be a real roller coaster ride for a while. Buckle up and keep your low cost base investments. Be philosophical.
  • yes...the economy and market are both cyclical, but not necessarily correlated. There is however a correlation, but just because the market bounced doesn%26#039;t mean the economy is right behind it. Just a few weeks ago the markets bounced hard a few weeks apart only to drop back. Things take time. Lately its been prices of energy that are putting a damper on things...the general public as a whole doesn%26#039;t care about the stock market.

    If you are concerned about the economy, write your congressmen and complain about the never ending war in Iraq...that%26#039;s what%26#039;s killing our economy (because of the high prices it spurned).
  • Like the first answerer stated, it%26#039;s going to be a huge rollercoaster ride. At the moment, stocks have jumped wildly but I suspect that it won%26#039;t last for long. It was only last week that stock prices fell disastrously.
  • If we all believe it, and act like it (not get too conservative with our investing and spending) it will smooth out more quickly. The government should NOT step in and try to fix this by bailing out financial institutions or individuals who gambled and lost!!
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