Step 3.Opredelite their desires and evaluate the results

Step 3.Opredelite their desires and evaluate the results
Most people in the U.S. know where at the moment is their local sports team. They know what the film won the award last Film Academy. They are versed in video games and even are aware of those debates that these games are called in the press recently. And still, few wondered how it looks against the investment market average figures. Why does this happen?
Quite simply, no one ever taught us how to make such a comparison, moreover, in theinterests of investment advisory fee does not include an explanation of its customers, how to analyze the results of their investments on their own. If you think that managing the funds, managers of mutual funds and brokers with a full committee want you to know how to behave in your investment against the market average, you are deeply mistaken. Professional investors do not tend to make you pay attention to the results of their work. This gives them plenty of room for error. We can cite many examples of what happens when some investors are beginning to look closely to the activities of "wise" and ask them to report their results in comparison with the market average, but we will not do that. Let's talk about more useful things.
Most new investors to believe that if you can not devote the process of managing their investments much of his time, you should not invest a dollar in anything other than an index fund - a mutual fund that simulates the behavior of a market index, step by step.
Do not buy stocks, bonds, gold bars (such as come to mind!) Or actively managed stock mutual fund. If you can afford to put aside some money for five years or so, but you do not have time to monitor how these funds work, put them in an index fund and leave it there all the time.
Nevertheless, we suspect that most of you are still more than an hour a year to analyze their investments, and you would not be too mind if your money is brought income above the market average. You should know that the management of your assets does not take much time, but getting higher than the average of the results is not something beyond your abilities. The problem is that most people do not consider the management of the funds as part of their business and do not believe that the market can be beaten. This is - a very unhealthy view.
Let's start with your core desires and hopes ... We recall once more that it is only on those money that you do not need over the next five years (and preferably even longer).
Are you surprised by the news that more than three-quarters of all mutual fund shares, which are imposed on us in the brokerage houses, banks, insurance agencies, magazines and on television each year show the average market performance is worse? (In fact, it may surprise you but in case you missed the "Step 1", because there we have already discussed this issue.)
At first, this news will make on you pretty shocking - to find out that the achievements of paid professionals so humble or just miserable. But, on second thoughts, these figures should not surprise anyone. Managed mutual funds charge fees, on average, at 1.5% of the assets of its depositors annually, mainly in order to finance their active management and marketing plans. But most fund managers have much to do (come to mind immediately, golf, tennis, social events and foxhunting), in addition to thinking about growth stocks, asset allocation models, as well as its continuous, predictable and debilitating weakness in the secondary market.
That sounds pretty harsh, but we wanted to do so and. Bad and very expensive mutual funds deserve much more blame - and now that they can not bring passable results, they must get their share of recognition at least for his ability to amuse his awkwardness. However, we will not spend on them too much precious time. Talk about problems is easy, more difficult to find a solution. Here we look at the effectiveness of Finance: Any money invested for five years or more, should not generate revenue below average on the basis of this five-year period. If this is not achieved, you are somewhere made a mistake, because you can get the average market rate of return in any index fund is not performing any research and not taking up almost no risk. You can use the system for monitoring your portfolio "Portfolios 2000," the proposed site Motley Fool, where you can find all of your investment returns compared to market averages and analyze the dynamics of each market from the day you bought it (the service is provided free of charge).
Do not abandon your desires, be ready to conquer the market, understand, why you did it or did not succeed. So, go to Step 4.