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2013/10/05

"The 2 dirtiest words in investing" -- why you’re losing $$$ in a rising market



Their "dirty word" is F***
Your "dirty word" is F***

Why too many Canadian investors are losing money
in a rising stock market...

And the simple solution that could save you $449 today, plus THOUSANDS more in the months
and years to come



Dear Investor,

I'm usually a pretty calm guy. But some things just make my blood boil.

(Maybe you can relate.)

Take this letter we received at Motley Fool Canada headquarters recently, from an investor who lives in a small town on the Trent River called Campbellford, ON.

My wife and I take great pride in living within our means. But nearly a decade with one of the large investing chains in Canada produced virtually zero improvement beyond principal -- and even some losses. Meanwhile our investment guy drove a nice truck and kept getting paid all along.


The man who wrote us the letter is named Bruce Pye. But the problem he describes isn't particular to him.

And even though Bruce is a good family man who would NEVER use a dirty word, he doesn't have to.

I'll do it for him.

In fact, I'll use two.

See, everyone knows that stocks have been going up for the past few years. But not everyone actually has their fair share of that money tucked in their pocket.

Why not? Well, the answer is a word that a lot of people who work in the Canadian financial industry would rather you didn't say out loud:

Fees.

Fees are like mosquitoes. One or two small ones are just an annoyance. But if you pay enough big ones – the kind that can really suck your blood – well, it has a way of ruining your picnic.

If that sounds a little fanciful, let me throw some cold hard facts at you.

If you had invested $5,000 in the Canadian stock market and $5,000 in the American stock market on January 1 each year for the past five years, you could have turned that $50,000 into $64,163 today. That's a pretty nice picnic. And in mathematical terms, a 28% gain…

But if you'd paid a typical advisory fee, you'd have just $49,744. In other words, you would have actually lost $256 of your original investment. Even though the market was going up!

And the worst part is, a lot of investors don't even fully understand all the fees they're paying. Or who they're paying them to.

Thankfully, there's a better way to invest… but I'll let our friend Bruce tell you himself.

You see, his investing story has a happy ending.

We wanted a way to keep more of our money... and have done great with Motley Fool stocks like FB, GILD, and HAS. Now we've paid off our mortgage fully in 7 years, put 75% of annual salary into retirement accounts, and doubled the square footage of our house. We're even sending 2 kids to university (and soon a 3rd) using the priorities & principles of long-term investing. We consider ourselves blessed.


I want that to be the ending of your story, too. Which is why I'm writing to you this morning.

But I'm sure you already guessed what the other "dirty word" is…

It's a financial mosquito-repellent that poses a threat to the livelihood of a lot of those so called investment gurus driving around in fancy vehicles that they bought with YOUR money:

Fool.

It's a word that means getting much more. And paying much less.

So you can get on with enjoying your picnic.

Enjoy your picnic.

Click the "zapper" above to find out how you can stop paying fees, and start investing better TODAY.

Taylor Muckerman, Investment Research Analyst, The Motley Fool

Taylor Muckerman, Investment Research Analyst, Motley Fool Stock Advisor Canada

Taylor Muckerman
Investment Research Analyst
Motley Fool Stock Advisor Canada




P.S.  I had the honor of meeting Bruce Pye at our Investing Expo in Toronto earlier this week. He's been a loyal member of The Motley Fool for so long that I hadn't even graduated from university when he first started! But there are also hundreds upon hundreds of other Canadian investors who've joined us since Tuesday… and it's no wonder why.

After all, we promised them our top 2 stock recommendations – and we delivered. Then we showed them how to get 46 more recommendations. And then we gave them something worth $449 right away. Click here to learn how you can get all of that too. But act fast – you only have a few days left.


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