The Global Stockmarket has done nothing for six years. The Australian All Ordinaries Index is coming up for seven years of no growth. Yes, of course there were bumps along the way, including a glorious run between 2003 and 2007 on the Australian market led by BHP Billiton and the emergence of China as a global superpower, but it was all given back, along with a solid trading rally in the first half of 2009.
This has been bad enough for small investors, most in it for either the very long term or the very short term (that is, day traders), but spare a thought for professional fund managers trying to make a living on fees – especially performance fees!
It’s been a lean period. Over the past five years the total accumulated return of the S&P/ASX200 – that is, including dividends – has been -11%; over one year -10%. It is very hard to charge 1.5% a year to look after your money when the average performance of the place you are putting it to work is going backwards. The old gag about “investing your money until it is all gone” takes on a whole new and sharper meaning.
Last year was a particular shocker. Stockbrokers have reported that trading volumes have fallen by as much as 80%; the broking business is hanging on by its fingernails, hoping that in 2012 volumes return to something approaching “normal”, whatever that might be.
Fund managers and their super fund clients have a different problem. Self-managed super was already growing pretty strongly before the market went into its five-year funk; now it’s growing even faster as more and more savers pull their money out of big funds to manage it themselves. What people need to know is that they need to be very careful as to where they invest their Self Managed Super Funds. Covered Calls is one of the safest of all stock market strategies and right now, the best way to discover how to invest with Covered Calls is to find a company that has the tools and experience. Fokas Beyond is by far the best company that will provide you with all the tools and rules to help build your SMSF in the long run. Educate yourself to be able to invest without relying on anybody else.
See normal super fund members and individual fund management clients are becoming deeply disillusioned with what they are getting for their money. Some are performing well, but they tend not to be the big ones most people have their money with. By their nature, big investment funds struggle to do much better than the index. They are not nimble enough; they can’t get large enough stakes in small companies to make a difference, so they stick with the liquid blue chips.
As a result, the average annual return of Australia’s balanced funds over five years is 1.6%, net of fees and tax, according to Chant West. That’s better than the Australian shares benchmark (-2.4% a year) because they have less than 60% of their funds in growth assets. The 10-yer return is 4.2%pa – not good. This cannot go on. How can you leave clients with 1.6% a year after taking out your fees? Banks are paying more right now per annum and they dont need to worry about fluctuations. Pretty soon they’re thinking they could do better themselves – and generally they can.
Back between 2002 and 2007 the share-market routinely produced annual returns of more than 20%. As a proportion of that a 2%pa management fee didn’t seem much at all – just 10% of the return in fact.
But when the available return is 4% per annum, suddenly the fund manager is taking half and giving the client 2%. God forbid if the return is negative year after year and you are still clipping the ticket to the tune of 1% and 2%. It simply doesn’t wash to say your fund hasn’t gone down as much as the market. For that reason, funds are desperate for the market to actually do something this year – their livelihood depends on it.
So there’s another reason for the rally over the past few months, apart from the fact that the world central banks have been pumping liquidity into the system to keep the banks afloat – the investment funds and their advisers need a rally to justify their existence, and their fees.
So they’ve pulled out the whip to urge this nag of a sharemarket on. Giddy-up, for God’s sake! They couldn’t stand another year of the market going nowhere: Their customers will drift away to cash and bonds or, worse still, property! The money’s available cheaply, thanks to the central banks (the investors’ friends) so let’s go.
So that’s what’s going on, folks. The world’s vast investment industry which relies on skimming large fees from the pension savings of you and me must make sure sharemarkets don’t just sit there – they must do something!
Best market to invest in right now is the US stock market. Over the last 4 months, there has been a rally and the Dow Jones is above 13,000 points. A very significant point to be and if it can hold above this level, many analysts including myself believe that the Dow will reach 15,000 points and maybe even 17,000 points by end of year 2013.
Stocks are still one of the best buys around with record highs possible for the next couple of years. Back in 2000 the price earning ration was around 30. That was the most the stock market had ever seen in the world. It’s no surprise that the next decade will be bad when you start at a price earning so high.
When you start at a price earning ratio of 13, looking back at history, the future is much, much better. From history, when the ratio was that low, returns over the next 1, 2 or 5 years have shown to be good and that makes a world of difference. So now is the best time to take control of your financial destiny, manage your own money and educate yourself on what is the most simplified, low risk, consistent return strategy and in my opinion, that is Covered Calls on the US stock market. With the Fokas Beyond education, you can outperform the fund managers and not have to pay fees to someone who has no interest in making you money.
http://www.fokasbeyond.com is something you need to look at and consider.
Yours in Abundant Success
George Fokas
Investor | Global Wealth Mentor | Educator | Key Note Speaker
==============================================
The information in this document is not intended as investment advice and must not be relied upon as such. Any advise provided in this document is General Advise Only. Past performance is no guarantee or reliable indication of future results. The recipient releases absolutely Fokas Beyond, George Fokas and/or any associates from all or any responsibility or liability for any losses, claims or demands that may be incurred as a result of the recipient using the information for investment or other purposes. The information is provided solely for general educational purposes and neither purports nor intends to be advice. No consideration has been given or will be given to the recipients’ individual investment objectives, financial situation or specific needs. Investments can rise and fall in value. The decision to invest or trade and the method selected is a personal decision and may involve an inherent level of risk. Although every effort will be made to explain the risks associated with the strategies, not all risks can or will be explained in any format. Fokas Beyond, George Fokas and/or any associates does not, and must not be construed as providing recommendations in relation to any securities or other financial products. It does not constitute and must not be construed as an offer of securities or other financial products nor is it an invitation to you to take up securities or other financial products. Furthermore, the information in this document and any attachments is confidential. The recipient acknowledges that the information contained within this document is subject to copyright and is proprietary of George Fokas and/or Fokas Beyond. Fokas Beyond, George Fokas and/or any associates made every effort to ensure with all reasonable care that the information was accurate; as no responsibility or liability is accepted by any member of George Fokas and including George Fokas for any errors, omissions or misstatements (however caused or arising).
If you suspect that this email or any attachments might have been intercepted or modified, please notify us immediately. Whilst every effort has been taken to ensure that this message is virus free when it leaves our system, we cannot guarantee that it is not infected with a virus when received by the recipient. Responsibility for ensuring that the messages and/or their attachments are virus free rests solely with the recipient.
If you receive this message in error, please notify us immediately and delete it and all copies of it and any attachments from your system. You must not directly, or indirectly, use, disclose, distribute, print or copy any part of this message if you are not the intended recipient.