After stripping away all the noise, a few simple truths about emerge. We know that chasing funds with a hot track record is a losing game. We’ve seen that even the best advice only works some of the time, and we know that high costs are a guaranteed drag on your returns.
When you're first getting started with , there's a tempting and seemingly logical strategy for picking mutual funds: just choose the ones that have been doing the best lately. It makes sense, right? We’re drawn to winners. This is why a huge amount of investor cash—over 150 percent of net flow in 2016—pours into funds with a four or five-star rating from Morningstar.
If you've been involved in over the past few decades, you’ve probably gotten used to some pretty impressive returns. But it's wise to plan for a future where the good times don't roll quite as high. The fundamental rule is simple: over the long haul, stock market returns are driven by the real performance of businesses—their dividend yields and earnings growth.
It’s one of the most frustrating secrets in personal finance: the returns that mutual funds advertise are almost never what their investors actually earn. It sounds unbelievable, but even industry insiders like Fidelity's Peter Lynch and Mad Money's James Cramer have acknowledged the issue. While most people know that actively managed funds often struggle to beat a simple S&P 500 index fund, the reality is even harsher.
When you think about making money in the stock market, you probably picture buying a stock and selling it later for a higher price. But what if I told you that’s only half the story? For anyone serious about , especially those just getting started, understanding the other half is crucial.
Have you ever looked at the stock market's performance for the year and then glanced at your own portfolio, wondering why your numbers don't quite match up? It’s a common experience for anyone involved in . The market might be up 7 percent, but your account doesn't reflect that full gain. The reason is surprisingly simple, yet it's something the financial industry doesn't spend much time highlighting.
How do you get ahead in the world of investing? The answer is surprisingly simple: buy a slice of every business in the United States and then just hold on to it. This straightforward concept is the key to winning a game that most other investors are almost guaranteed to lose. For anyone exploring , it’s important not to mistake simplicity for a lack of sophistication. It’s a principle that has stood the test of time.
Building real wealth, especially when you’re in your 20s and 30s, is less about a secret formula and more about your mindset. The entire journey of personal finance is built on a foundation of how you think about money. It’s about understanding the psychology behind wealth, building solid habits, learning from the right people, and connecting with others who can help you grow.
Your twenties and thirties are a whirlwind of major life changes. These years are packed with milestones that can shape your financial future, from getting married and starting a family to climbing the career ladder. To make sure these events build a strong foundation for your long-term goals, it's crucial to approach them with a clear financial plan. Let’s walk through how to handle the money side of these big moments, including how to prepare for the unexpected bumps along the way.