Page 4 September 7, 2017
Finance
Five Investment Strategies that Can Outlast Market Spikes
(BPT) - You’re familiar with the saying “If
it seems too good to be true, it probably is”?
Just like any other scheme to “get rich
quick,” attempting to buy low and sell high
based on intermittent fluctuations in the stock
market-also known as “market timing”-is
almost always a losing proposition over
the long term for the investor. Studies have
repeatedly shown that those who attempt
to align their investments with short-term
fluctuations earn less than those who stay
in over the long haul.
“Once again, market fluctuations are messing
with average investors’ minds,” says J.D.
Roth, author of “Your Money: The Missing
Manual” in Entrepreneur. The truth is that
even the most stellar investment advisor lacks
a crystal ball into the future, and can only
make recommendations based on historical
research, industry guidelines, and experience.
So what are some better guidelines for
investing in the stock market? Consider
the following sound strategies, built on the
mounds of evidence saying market timing
doesn’t work as a long-term strategy:
Set clear goals and objectives such as
funding children’s college educations or
investing for your own retirement. Instead
of trading when you think it’s the right
time, the principle of dollar-cost averaging
(DCA) says to invest a fixed dollar amount
at predetermined intervals.
The advantage of dollar-cost averaging
is that you put your money into the market
earlier-increasing the likelihood of price
change-rather than holding onto cash until
you think prices are low.
Trying to achieve alpha-i.e., beating the
market with price returns-isn’t necessarily
the most evidence-based way of getting the
highest returns over time, especially looking
at your returns net of costs and taxes.
By investing in funds that largely track
Eclipse from front page
The moon is crossing over in front of the sun, creating a crescent sun. Baily’s beads, or Diamond ring effect.
owned by Deborah and Sam Appel. Actually
it was a strategic ploy on my part since the
only portable restroom was nearby. We made
friends with the Appels instantly.
Kyle set up the cameras for the next morning
and explained the process of the eclipse to
our neighbors. Then the parachutist gave us
a show by making continuous jumps before
sundown. Finally nightfall engulfed our world
and we found ourselves settling in for what
would be a cold night. We had two pillows
from Costco and two moving blankets to
bundle up with and it wasn’t enough.
Morning and the big day for us solar eclipse
chasers were now upon us. What seemed like
an eternity of sleeping on a cramped bench
seat while Kyle was stretched out on the
floor was a welcome sight when daybreak
opened our eyes.
Sam and Deborah brought over a cornucopia
platter of fruit and homemade cinnamon
bread for breakfast. Deborah, being the
iconic mother that she is, felt sorry for us
underequipped campers and wanted to make
sure we were fed. In the meantime, Kyle
continued to educate our neighbors on the
dos and don’ts for viewing the eclipse.
It’s hard to describe the anticipation
leading up to one of God’s truly beautiful
moments. Then at precisely 9:06 a.m., it all
started. Our world of sunlight was on the
verge of being silenced by the passing of
the moon. Kyle would announce different
facts relating to the epic event. The entire
eclipse process going through all its phases
takes roughly two hours.
There are a few precious moments to
capture the beauty of this event. Just prior
to totality the Baily’s beads, or Diamond
ring effect, is prominent. Kyle reminded our
neighbors it is not safe to view this without
proper eye protection.
Then it happened at 10:18 a.m. PST--the
totality of the sun being completely blocked
Kyle and Gregg prepare for the solar eclipse.
All photos by Kyle McMullin
Totality of the sun is being blocked by the moon.
a market index (index funds), historical
results show that the lower fees typical of
index funds and the long-term gains often
outperform actively managed funds with
higher fees.
A major reason why investors should lean
on professional support in today’s world is
so that they can optimize their investments
to lower taxes. Specifically, how assets are
located within tax-advantaged and taxable
accounts can be managed to lower your
tax liability.
Finally, any time you want to reinvest dividends
or have reason to switch to a different
investment, there are ways to make regular
transactions as tax-efficient as possible.
When it comes to outlasting a spike in
the market, any investor should be aware
of their own biases and behaviors. Pay little
attention to financial TV shows and other
media reports that hype short-term fluctuations.
And be cognizant of the speaker’s
motivation. Those who think they have a
real get-rich-quick scheme are unlikely to
share it with others.
Above all, don’t let uncertainty stop you
from investing. If you look back all the
way to 1926, keeping your money in cash/
cash equivalents has underperformed both
bonds and stocks. The key thing is to just
get invested.
Betterment optimizes its technology and
experience to help you make informed decisions
in your investment strategy. Founded
in 2008, the company manages $9 billion
in assets. Investing in securities involves
risks, and there is always the potential of
losing money when you invest in securities.
Before investing, consider your investment
objectives and Betterment’s charges and
expenses. Betterment distributed this article
through Brandpoint. Visit Betterment.com
for more information. •
by the moon. A roar of approval from the
throngs and mass of humanity filled the air.
The temperature dropped 15 degrees and
a 360-degree sunset was seen. Perhaps the
loudest and most vocal to voice his approval
was Kyle, who was so excited.
The eclipse lasted two minutes and three
seconds of totality and seemed to give everyone
a sense of gratitude. When the sun started
to peek around the moon as it passed by, a
number of cows in a nearby pasture started
mooing it up as if to say good morning.
As morning darkness became morning
sunshine, a mass of vehicles hit the road in
an attempt to beat the traffic. Traffic was at a
standstill and stayed that way for four hours.
The beauty and uniqueness of a darkened
world during the day made this experience
all the more memorable. It may have been
just two minutes and three seconds long, but
the memory will last a lifetime. •
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