Tony Robbins: Money – The Road Ahead & The Complexity of Stocks

“There are more than 40,000 stocks to choose from in the world today, including 3,700 on various US stock exchanges. By the end of 2015, there were more than 9,500 mutual funds in America alone, which means there are far more funds here than stocks! How ridiculous is that? Add to that nearly 1,600 exchange-traded funds, and you’re faced with so many different investment choices that your head starts to spin. Can you imagine standing at an ice-cream counter and having to choose from 50,000 flavors?”

Excerpt From: Tony Robbins. “Unshakeable.” iBooks.

Hmmmm, now you guys understand why I was so apprehensive and defensive in talking about Warren Buffet on my last blog.  You get it now, don’t you?

Have you ever been entangled in a menus madness before? I’m talking about going to a restaurant and seeing such an extensive menu that drives you insane? You want to pick something off page 3, 5, and 32.  Simplification is where it’s at, and there’s no simplifying when it comes to WallStreet.

So basically you get a lot of these financial managers who try throwing money down at specific times while saying, “we’ll beat the market.”  Most mutual funds charge high fees but have poor investing capabilities.  So what happens? 96% of them fail to beat the market and you end up overpaying for under-performance. It’s like paying for a Porsche and you end up driving home in a damn wagon.

Nonetheless, let’s break down these different types of funds.

“HEDGE FUNDS VS. MUTUAL FUNDS VS. INDEX FUNDS

For those unfamiliar, a hedge fund is a private fund available only to high-net-worth investors. The managers have complete flexibility to bet on both directions of the market (up or down). They charge hefty management fees (typically 2%) and share in the profits (typically 20% of profits go to the manager). A mutual fund is a public fund available to anyone. In most cases, they are actively managed by a team who assembles a portfolio of stocks, bonds, or other assets and continually trades their holdings in hopes to beat the “market.” An index fund is also a public fund but requires no “active” managers. The fund simply owns all the stocks in the index (for example, they would own all 500 stocks in the S&P 500 index).”

Excerpt From: Tony Robbins. “Unshakeable.” iBooks.

In other words, we’re going after index funds.

It’s like the saying goes, guys.  “When a person with experience meets a person with money, the person with experience ends up with the money; and the person with money ends up with an experience.” We’ll show you how to navigate this game so you’ll never get taken again.” – Tony Robbins

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