Investing profitably can be a confusing task. Too many people choose to employ the help of an investment advisor or a fund manager before we proceed with our investing strategies. Oxford Club is a private network of investors that believe the educated individual can invest without the aid of those so-called professional advisors. Studies have shown that investors who follow the benchmarks outperform investors who use advisors. The Oxford Club believes if investors follow three pieces of advice, they will have much better results than most of today’s investing Americans.
The first step is to save more money. Only 24% of Americans have saved $1000 toward retirement and less than 50% have saved $25,000. The average American earns at least $35,000 annually. To retire at age 67 with the average death occurring around age 78 for men and 81 for would mean, they should retire with at least $200,000 saved to supplement any benefits expected from Social Security. The average Social Security benefit is only $1,360 per month, that’s $16,320 annually, less than half of what they earned during their working years. Most people couldn’t make that kind of adjustment to their living.
The second step is to reduce your investment expenses. Paying a fund manager or an investment advisor could cost as little as 1%, but is the investment only returns 2.4%, that’s 42% of your return going to someone who isn’t actually increasing your earnings. If the investor simply follows the benchmark investments, they will outperform most fund managers and investment advisors.
The third and final step is to rebalance your portfolio. We are in the middle of remarkable period in the market. It just keeps growing. Now, is the time to sell back some of those appreciating asset classes. Remember sell high and buy low is the winning strategy. Rebalance your portfolio by selling some of your winners and buying more of your losing investments. Cycles turn and they will soon, so get your portfolio ready.