What You Must Know About Investing Returns

"We don't look to jump over 7-foot bars: we look around for 1-foot bars that we can step over. Warren Buffett

Important facts  

  • The only thing that counts are your real returns after expenses and taxes.

  • Most people think they are making progress because their nest egg is growing, but they do not compare their returns to appropriate benchmarks.

  • In evaluating your returns, you must consider the amount of risk you are taking.

What successful investors know about returns 

  • Making the correct asset allocation determines 90% of investor returns.

  • Compounding is the important factor in determining long-term returns.

  • Expenses and taxes dramatically reduce your returns.

  • You must compare your returns to the amount of risk you take.

  • You can eliminate the possibility of under-performance by buying a market index.

  • You can beat 75% of investors each year and 94% of investors over 10 years by buying index funds.

  • Losing money has devastating consequences on your returns.

  • Buying what's "hot" usually ends up badly.

  • Taking too much risk causes investors to make mistakes, hurting returns.

  • There is no evidence that everyone can emulate successful investors [like Peter Lynch].

  • Neither individual investors nor asset managers have access to superior information or the ability to process information in a superior manner.





  Risk Diversify  

Tel: (213) 915-4015


Copyright 2005-2009, All rights reserved.