July 12, 2009

Lazy portfolios


Paul B. Farrell: Lazy Portfolios upend popular active funds - MarketWatch: "ROYO GRANDE, Calif. (MarketWatch) -- Guess what? Actively managed mutual funds are bad news, filching your hard-earned money."

Mutual funds have been robbing people blindly for years - the managers of these funds have been siphoning off the top at will in down and up markets. Invest in an index fund - it's always a better option. When you account for trading and commision fees, in addition to the rate of inflation, your real value of capital return is minimal. This includes 401k plans, 529 plans, etc. that average people regularly contribute to and simply hand over their money to "financial advisors" who are really just salesmen that convince you their corporation is a legit one and holds true the sound principles of financial responsibility for their customers. Reminds me of a few "sound" financial institutions - Wachovia, Merrill Lynch, Lehman Brothers - were these not "sound" financial institutions? Didn't these companies fail or get bought out by another institution? It's time to wake up.....

The super rich have been stealing from average Americans for years by using the government, financial institutions, and financial advisors as the vehicles to get access to our money. So why would I waste my time saving and investing my money in these organizations just for them to lose 30% of my 401k plan? Or to lose everything if I was suckered and invested in a former Nasdaq chairman's investment fund (Bernard Madoff was his name). There is a better way to obtain wealth and success without become a stooge of these institutions who have only but themselves in their best interest.

The best way is to invest and prepare for the future is by investing in cash flow, such as, owning businesses, owning commodities, investing in stocks that constantly pay good dividends, and investing in rental properties that will pay you rental income. This way your money keeps working to produce more money so that you will always receive income via your investments whether you're in a good or bad economy. And then you won't have to worry about stressing over saving enough....

Just a thought....