There’s no doubt you need to work for your money! Investing isn’t something that should be taken lightly or performed with “hope” for growth in mind. There is an element of ACTIVE action required to be successful.
I wanted to share this example going through probably this pandemic. I want share how two of my retirement accounts faired from Jan 1st 2020 until Aug 2020.
The first account is a Managed Portfolio — PASSIVE IRA (i.e. The IRA company ask you for the risk tolerance and then they do investing for you). They make a commission based on a percentage of the balance. For this account I used an Aggressive Growth strategy with mostly stocks and a small component in bonds.
The second account is a Self- Managed ACTIVE IRA (i.e. where I have full control to buy and sell stocks, ETFs, managed funds etc). For this account, since I have direct control over it, I was able to buy and sell as I see fit with the market movements each month. I honestly traded at most once a month, mainly to rebalance from one stock to another. Mostly buying blue chip tech stocks.
So I know this may not be the fairest comparison since the portfolio is so different. But I did want to use this to help explain how far your money could go just by taking a more ACTIVE approach to investing.
And the results… 🥁🥁
A whopping 43% return on the Self-Managed option compared to the 8% return on the Managed Portfolio. With compound interest, Can you imagine how much further you can achieve just by starting off better with your money?
I know it’s hard to compare this during this current climate with the ongoing health crisis and “stonks” going beserk🤪. However, the point I am trying to make is, when an opportunity appears to buy in on a low or exit on a high, when you are in control, you can definitely influence the outcome more! After all, there isn’t really anyone there on the other-side of the Managed Portfolio actively monitoring your portfolio.
