Wednesday, June 21, 2017

Being smart with $$ -- Are you paying a fee for market timing

Are you paying your financial advisor $10k to $20k in fees every year because you think they can beat the market? Research firm DALBAR studied whether market timing works. Their results showed that the S&P 500 UNmanaged stock index returned an average annualized 11.1% over 30 years while the average U.S. stock market investor earned just 3.7% annually with most of the underperformance coming from market timing. Wow. Market timing cost these people almost 7/8ths of their money due to the power of compounding. This study is mentioned in a Motley Fool article (5/28/14) and their conclusion is that market timing is detrimental to your financial health. Do ya think? A buy-and-hold strategy avoids the mistakes that market timers make. Speak to an hourly, fee-based planner who can help you create a portfolio that's right for you without the exorbitant, recurring annual fees that many advisors charge and without market timing. 

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