In a recent poll of fund managers, more than half said that they still expect the market to climb higher through at least 2016, while just over 15% claimed to be bearish.
That’s no surprise to me considering what I know about fund managers and how they make their money.
Here are the common lies those money managers could be telling you…
Have you ever stopped to think about how fund managers make their money? How do they get paid?
Generally speaking, fund managers – like the one who may be handling your money and investments for you – get paid a percentage of their funds’ average assets under management.
“The more the merrier” rings truer than ever when it comes to these people.
So what would you expect them to do…
a) Be honest and truthful when it comes to their outlook on the stock market, even if they believe it’s headed downward into a bear market?
b) Or always tell everyone that we’re headed up and that now is the perfect time to start investing?
Well, the more people they can bring in to invest with their funds, the more they will make, so of course they’re going to choose option B every time.
If they were honest when they suspected a bear market approaching, they’d risk losing investors who would rather keep their money on the sidelines!
And another lie they lead is that each and every fund manager has a complicated strategy they implement that can’t be beat. I actually think that many fund managers believe their individual strategies are fantastic, but the truth remains that roughly 70% of investment professionals can’t even beat the good ol’ S&P 500 stock market index, which is just a representation of the market as a whole.
That means most people could do better just by investing in shares of something representing the overall market instead of dumping their money into these funds that try to overcomplicate investing.
That’s part of the reason why Wall Street Informer exists – we want people to know that there are better options than what we’ve been told to do all our lives.
And where we see a bear market approaching, we don’t lie about it. Instead, we use the tools that allow us to profit from falling stocks just as easily as skyrocketing ones!
