Back over 25 years ago, I took the course that stockbrokers take (more complex than the mutual fund sales guys require) and got a position selling mutual funds - for a brokerage, so not confined to selling one company's products.
We used to hear presentations from various mutual fund managers and I remember a sort of slogan that one competent manager gave us:
"I like to buy a Dollar for 60 cents!", said Peter Cundill - who was also a marathon runner.
I bought some of his flagship fund - still have it and pleased with it.
Some of them used to say that they'd give orders to various stockbrokers to buy certain stocks, at a given price ...
... quite a long way below the levels at which they were selling at the time, when markets were high.
Sometimes they'd ask, "Are we getting any fills?" and the answer would be, "Not at these prices!".
Later, after a substantial drop in the markets, when they'd ask, "Are we getting any fills?", the answer would be, "Yes, we've had several, recently!".
However, despite their claims to superior knowledge, skill and experience, few mutual fund managers are able to produce better rates of growth than the market averages ... in fact, a number of them buy substantial amounts of investments that track the market averages (that are available to individuals, but few know of the Exchange Traded Funds ... which charge minimal management fees, as well).
What's one of the major reasons for such reduced performance?
A substantial part of the reason for that erosion of growth rate is the fees that the mutual fund managers charge - usually 1.5 - 2% (sometimes higher) per year in the U.S., 2 - 2.75% (sometimes higher) in Canada.
If one figures average growth rates around 8%, that's 1/5 - 1/6 of it.
Which makes it financially worthwhile for individuals with substantial investable assets (or even less, for less volatile core asset) to learn how the markets work and buy individual stocks directly.
While it is difficult to time the markets, there are times when the markets are high and times when they are low.
Several markets have dropped substantially in recent weeks, partly due to the U.S. inadequately funded mortgage system breaking down.
Before the weekend, U.S. leaders announced a bailout, which indicates that they expect some tough times ahead and some analysts claimed the bailout to be inadequate.
Most (almost all) markets across the world dropped substantially overnight, and U.S. markets are closed today, Martin Luther King memorial day, Monday Jan. 21, '08.
At a few minutes after 10 a.m. the Toronto market was down a large amount, over 500 points from a base around 12,000, around 4%.
As of 3:00 it was down about that level ... and of a list of 45 stocks in which I'm interested, every one is down, except a junior mine, digging gold in n-w Africa, whose price was CA$0.47 on Friday, today has risen half of a cent to CA$0.475 - not what one would call an outstanding increase.
Whether there is more room for the markets to fall is anyone's guess - quite a few would say that there may likely be more drop before there may be a levelling out and some movement upward again.
But - whether now or later what was a Dollar in the stock market is quite a bit less.
Generally speaking, the markets will recover ... but when it begins is anyone's guess.
How long it takes to build a floor and move up again is anyone's guess, also.
Is a Dollar of former value on sale for 60 cents?
Not yet. I think.
No one knows when the market will stabilize and begin to move up again.
But those who watch it for bargains are watching it now.
And finding some money to invest, ready to take action when they feel that the probability of substantial further drop is low, but the opportunity of buying at this low price is rapidly disappearing.
Skilled investors learn their game.
And are patient.
Some get rich quickly, but most don't.
Most are content to win the race slowly and more or less steadily, taking advantage of downturns when they happen.
Only using money that they can leave undisturbed for several years - preferably up around 10. Or more is even better.
Toronto market closed down 590 points - some seemingly impregnable Canadian stocks were dropping.
Some analysts predicting a substantial drop in New York tomorrow, Tues. Jan. 22.
Good wishes for increasingly skillful use of your current income.
God wishes for increasingly skillful managementof your assets, to achieve both short-term and long-term goals.
ole joyful
P.S. Took 6 courses leading to advanced qualifications, passed only 5. Courses revamped, I'd have to start over. At age 70+??
I think not.
I live comfortably, if frugally (by choice, not necessity) on three + one pensions, not needing to tap into investments.
So I don't really need income from an investment advisory business, either.
Finding joy in life, seeking to emulate the Greatest One that I've ever met ... who recommended, "Love your neighbour as yourself".
And I, a male, add, "But ... not my neighbour's wife!".
o j
cbtexas
glenda_al
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