You hope your investments are doing ok. You’ve owned those mutual funds since you were in 8th grade.
Your mutual funds have a little hair on them. Maybe a little fungus. Or a little bit of mold. Oy.
You wonder if you could be doing anything better with your money.
You don’t know how to evaluate your investment stuff.
Should you buy more of what you’ve got? Should you sell? Or just stay put?
In the back of your mind you just hope everything will work out. You have so much on your plate between work, your family, and trying to find some time for you. Add in managing your money – and it’s just too much. Right?
I get it. That’s why I write these newsletters – every week for 7 years – to try and make it easier for you.
So….You don’t want to “hope” your way to financial success. You have to be intentional with how you deal with your investments. That means taking action. It means reviewing your portfolio. And yes, it means learning how to do it.
If you want to learn about investing, you must read the rest of this. Seriously.
For many people, it’s easier to own mutual funds than individual stocks. Mutual funds can give you some diversification. Rather than picking specific stocks, a mutual fund could own hundreds if not thousands of stocks.
So…. Let’s use a hypothetical example of owning a portfolio of mutual funds.
- Every mutual fund has a benchmark. That means you can compare how your fund is doing vs. its peer group (benchmark).
- If it’s underperformed its peer group for a while, that’s not good.
- Are you actually still reading this? Yay!! You are rockin’ it out!!!
- If it’s kept pace or outperformed its peer group, that’s good.
- An easy way to keep track with a benchmark is to just buy the benchmark! That’s what an index fund is. It’s a mutual fund that owns the same stuff as the benchmark does.
- That way you would know that the fund you own is at least keeping pace with its benchmark.
- There have been tons of studies that say index funds have outperformed about 80% of active funds (non index funds). Plus index funds usually have lower fees than active funds.
Step 1 – Consider owning index funds. It’s a simple way of investing, and it could make it easier for you to stay on top of your investments.
You may be thinking: which index fund should I buy? Or what should I do if my index fund stinks? Email me. I will stop what I am doing and personally respond to you. I wonder who will actually take me up on this. Anyone. Bueller?