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Category Archives: Law of Compound Returns


Confessions of a Former Stockaholic

Several years ago, our firm retained Miller McMillian, a copywriter, to help us with our website.  Little did we know, he began investing using the methods we’ve been espousing in our newsletters and blogs.  He asked if he could share his experiences. First of all, I am not a professional stock picker. I am an [...]

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Remember the Law of Compound Returns

When the markets get turbulent as they are today, investors get emotional. We want to react. Today is a fear day, but last month there were greed days. On fear days, we react. We wonder, “How much more money can I lose? Should I be getting out?” On greed days, we get excited and after [...]

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Americans are More Indebted Than the U.S. Government

You may remember J. Wellington Wimpy, more commonly known simply as Wimpy, Popeye’s beloved friend from the iconic comic strip. Wimpy was soft-spoken and intelligent, but also cowardly, lazy, stingy, and gluttonous. A true scam artist, Wimpy usually finagled his favorite meal, a hamburger, from some unsuspecting patron at the local diner. Wimpy’s parsimonious ways [...]

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Double Your Money With Compound Returns

The law of compound returns is a force of nature and understanding this concept is critical to your success as an investor. It is how the rich keep getting richer, but maybe not how you are led to believe. Simply put, the law of compound returns says money left alone creates more money. Einstein said, [...]

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How Money Doubles — Understanding The Law of Compound Returns

The latest biography on the world’s most famous investor is titled “The Snowball – Warren Buffett and the Business of Life.”  The term “snowball” is a metaphor for a core investment concept:  the Law of Compound Returns.  Understanding it is critical to your success as an investor and should be at the center of all [...]

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Do Your Homework To Understand Mutual Funds and Their Fees

The Supreme Court finally examined the problem with mutual funds with regards to their fees. The result – not much protection for the average retirement investor. The Court decided to rule against further legislation and to keep the onus of fee due diligence on investors. You can imagine that the $11 trillion mutual fund industry [...]

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The Law of Compounding Makes Fees Quite Sizeable Over Time

Many do not flinch at paying 1-2% of their asset in fees to a financial advisor, but if one were to better understand the Law of Compounding one might look at 1-2% differently.  The Law of Compound Returns is a force of nature.  Simply put, the Law of Compound Returns says money left alone creates more money. [...]

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Tracking 9 ETF Portfolios – Surprise Winners and Losers So Far in 2008

The famous professors at Yale have proven that asset allocation accounts for 90% of a portfolio’s return and that stock picking and market timing account for less than 10%.   So what a great time to look at how different asset allocations are faring in this market! In 2008 it turns out that asset allocation decisions have [...]

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