As an investor, your two biggest allies are time and the rate of return on your investments.
The more time you have to grow your investments, the faster and bigger those investments will grow. This is the power of compounding. Over time, your money does not grow linearly. It grows exponentially. Good investing is a get-rich-slow game. Invest the right way and let the time value of money go to work for you.
But most people don’t pay attention to this powerful compounding effect. If they did, they would fix their 401K or IRA accounts as quickly as possible. The longer you wait to improve your investing results, the less money you will have in the future. People should have a sense of urgency about fixing their retirement accounts.
Most people understand the concept of compounding and the benefits of getting higher returns on their investments, but most are not aware of how powerfully these two factors work together. Increasing your investment returns over long periods of time provides a multiplier effect for growing your wealth.
Let me show you a simple example. A 35-year-old investor has $100,000 in an IRA account. They currently follow the best advice from the investment services industry (asset allocation) by spreading their investments over large cap stocks, small cap stocks, international stocks and bonds. They might use a Target Date fund, or they might pick the investments on their own. In the long run, this strategy should produce an annual investment return of 6.5% - not bad but not great either. Because of the compound effect, they will have 87% more money after 10 years, 252% more money after 20 years and 562% more money after 30 years.
Now let’s look at how the compound effect works when we combine the impact of time with higher investment returns. The same 35-year-old investor could produce annual investment returns of 9.5% per year if they simply invested all of their money in an S&P 500 index fund (the Warren Buffett strategy). When we compare the results of getting 6.5% per year to 9.5% per year over time, the differences are amazing. After 10 years, the better investor would have 1.3 times the amount of money. After 20 years, they would have 1.7 times the amount of money and after 30 years, they would have 2.3 times the amount of money – an additional $860,000.
When the investment returns are even higher, the results are even more incredible. Using our Market Signals investment system, people should generate average annual investment returns of 12.5% or more. The multiplier effect generates 1.7 times more money at age 45, 3.0 times more money at age 55 and 5.2 times more money at age 65 ($3.4 million vs. $661,000).
Because of the compound factor of money and the multiplier effect of higher investment returns, you should start fixing your 401K or your IRA immediately. The longer you wait the less money you will have to spend in retirement. Waiting will cost you dearly.
Stay Disciplined My Friends,
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
The stock market has marched steadily higher over the last six weeks. Both the S&P 500 and the Nasdaq are now up over 22% for the year.
Since their recent lows in early September, the S&P has increased 8% and the Nasdaq has climbed 10%.
Economic data has been mostly positive over the last couple of months and the stock market reacted positively to the 50 basis point interest rate cut from the Fed in September.
Despite the positive trend in stock prices, we do expect more volatility going forward.
Our models indicate that the S&P 500 is overvalued by 16% right now.
The stock market is expecting a Goldilocks economy – not too hot and not too cold.
China’s economy is softening.
When markets are overvalued, any negative news can cause a steep drop in the markets. If you do not have a strategy to protect your money against losses like our Market Signals system, you need to be prepared.
On the other hand, some of the biggest gains in stock prices come at the end of bull market cycles. The biggest gains happen before the fall.
Despite these concerns, we remain 100% invested in the stock market at present. Because our Market Signals system has built-in protection against market collapses, our customers are fearlessly benefiting from the large gains this year and over the last month. Our customers win both ways. If the market keeps rising, they get the full gains and if the worst-case scenario happens, they are protected.
Now would be a good time to check out our Market Signals investment system.
Click Here to learn more.
Stay Disciplined My Friends,
Phil McAvoy
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
With stock market values hovering at all-time highs, you need to make sure that you have a proven strategy to protect your savings against large losses in the event of a bear market.
Most experts believe that the S&P 500 is currently overvalued by somewhere between 10% and 20%. My valuation model indicates that the S&P 500 is overvalued by 14% right now. The last time valuations were this high was January 2022, just before the 2022 market collapses.
You need a way to protect your life savings from getting crushed in stock market collapses.
The investment services industry has nothing to help you with this challenge.
Trying some half-baked approach on your own will only lead to disaster. There are literally millions of those sad stories.
We all want Growth and Safety. We have been told we can’t have both – that you can either have an investment strategy built for Growth, or one built for Safety. I simply couldn’t accept this. I thought we could use the markets irrational movements to our advantage.
I spent the better part of a decade using my “Mad Scientist” data skills working on a solution to this problem. It wasn’t easy. If it were, everyone would be doing it.
I toiled and toiled away at this thing until I had something that I could prove would work. I love this kind of challenge. It isn’t perfect, but it is better than anything I have seen or tried before. And perfect was not the goal, just better.
The other systems like this used by the professional investors are based on rolling averages and they are not very accurate, and they are too slow to react when they are wrong. They can’t even beat the S&P 500 in the long run. We beat the S&P 500 easily.
I must admit that there were months of sleepless nights trying to figure out this challenge. I enjoy reading Ryan Holiday’s books and in THE OBSTACLE IS THE WAY he talks about how obstacles always break apart under relentless pressure. This powerful investing system is proof of that.
In the chart below, I compare the value of a portfolio using the Market Signals system to one using a Target Date fund (the Fidelity 2050 fund). The blue line is the Market Signals account, and the Target Date fund is the orange line.
Notice how the Target Date fund was down about 25% in October of 2022 while the Market Signals portfolio only dropped by 10% at its low point. The Market Signals account was back to even by early 2023 while the Target Date portfolio was still down 20% in August of 2023. The Market Signals account was up by 10% by August of 2023.
The Market Signals account generated returns of roughly 30% higher than the Target Date portfolio over this time period.
The orange line in the graph is the "safe strategy" that was recommended to you by the professional advisors. How safe does the standard investment industry strategy look?
And here is the hidden little secret about our Market Signals system. You will get higher returns and much more growth in your portfolio. When you lose less money when the stock market declines, you make more. It is simple math.
You need this kind of protection for your retirement account. You can get it by signing up for a Market Signals subscription. Click here to learn more and to sign up today.
And Market Signals comes with a 100% Satisfaction Guarantee. Because I am so confident that this system will improve your investing results and protect your savings, you can cancel at any time for any reason. No questions. No hassle.
Click here to sign up now.
Stay Disciplined My Friends,
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
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