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BetterInvesting Weekly Stock Screen 3-11-13 A Look at Three Types of Mutual Fund Load Fees

Staying in the Market’s Now Paying Off, BetterInvesting Member Tells ‘The Wall Street Journal’

By BetterInvesting, Empowering Investors Since 1951 On March 11, 2013 · Leave a Comment · In BetterInvesting News, Financial Markets, Investing, Investing News, Investment Clubs, Investment Education, Personal Finance

Retirement fund growsBruce Kennedy, now president of BetterInvesting’s Central Pennsylvania Chapter, at first cashed out his money when the stock market began to slump in 2008, according to a recent article in The Wall Street Journal. Kennedy, a Harrisburg, Pa., retiree, says he’d hit his personal “breaking point.”

“The Dow closed at 8451.19 that day,” the story says. “By that December, about three months before the market bottomed out, he began to creep back into stocks.”

“Today, the Dow Jones Industrial Average is sitting at a record high. Yet small investors haven’t shared equally in the spoils. People like Mr. Kennedy are the fortunate ones. … The investors who had the fortitude to stay in stocks have seen their portfolios revive. Between the last market closing peak on Oct. 9, 2007, and Tuesday, a Standard & Poor’s 500-stock index exchange-traded fund has had a total return of 11%, including dividends, while an ETF that tracks the Dow Jones Industrial Average has returned 16%, including dividends.

“Investors prescient enough to put new money into a Dow ETF at the bottom in March 2009 have seen that money grow by 142%, including dividends. Those who pulled out at the bottom suffered losses of 52% from the 2007 peak until then.”

By the end of 2008, when stocks looked cheap, Bruce began to rethink his strategy. He’d been a member of BetterInvesting and in January 2009 he became a club leader. He told fellow club members the time had come to be very picky about stock selections.

“By the end of 2009 he was investing aggressively again, picking up stocks that he thought were trading at bargain prices. Now he is back to his precrisis level of almost 90% stocks and says his portfolio is worth about 45% more than where it was before the market started to drop,” The Wall Street Journal says.

“Mr. Kennedy says he favors stocks in part because low interest rates have depressed the returns of many other potential investments. He is concerned that lower-risk investments like certificates of deposit and money-market accounts won’t give high enough returns to beat inflation. Both money-market accounts and short-term CDs yield less than 1% a year, on average, while consumer prices have increased 1.6% over the last year.”

As he told The Wall Street Journal: “If you’re not keeping up with that, you’re losing ground.”

About BetterInvesting
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was born out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/investing/landing/openhouse/blog/index.html or call toll free (877) 275-6242.

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Tagged with: Business & Finance • individual investors • investing • Investing Education • investment clubs • Investment Education • Long-term Investing • personal finance • Shareholders • Stock Market • Stock Studies • wall street 
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