Home
>
Stocks & Mutual Fund
>
The Stock Market - How Just One Question Will Tell You All You Need To Know About Your Stock Broker

The Stock Market - How Just One Question Will Tell You All You Need To Know About Your Stock Broker

Last time we looked at the real performance of the stock market (we used the Dow Jones as a reference point) and the apparent performance that makes the headlines and can be seen by a casual look at a chart or "ballpark" figures - briefly; the Dow went up, for example, less than 50 points between April 1999 and April 2005 - essentially 6 years with no growth!

But behind that seemingly "becalmed" Dow there were at least 10 significant moves each and every year totalling many thousands of points!

But did the Wall Street Moguls, the so-called "Masters of the Universe" make you any money from those huge movements?

No.

Of course they didn't!

Here's how I know...

The web is a goldmine of information. Knowledge that was just not available to the private investor or trader is now there at the press of a mouse button.

Forget the Freedom of Information Act - the Internet leaves it standing.

Foremost amongst websites offering information about the financial facts of life (the things that affect you directly - Mutual Fund performance etc) is Morningstar.com.

And amongst other things, morningstar.com publishes a league table of mutual funds on a weekly, monthly and annual basis.

If you check out the table that I have provided at my website (www.TriggerSystem.com - full link at the bottom of the article), you'll see the performance of the top 20 or so mutual funds over the last 10 years.

I've chosen the 10 year chart because mutual funds are essentially long term "investments", and which most people seem to keep almost for ever (the chart on my website is by it's very nature a little bit out of date, but things haven't improved too much since that screen shot was taken. If you want the up to date figures just go to www.morningstar.com and search their data base for the 10 year performance of mutual funds)

Take a look...

You'll see that the top rated fund, over 10 years, has shown a total growth of 23% - which at first sight looks fairly impressive; 23%; wow!

But the problem is, that 23% is total growth over 10 years, not growth per annum.

So the 23% total growth starts to look like a less than impressive 1.7% per annum compounded (hey, even the banks are giving more than that on deposit).

I'll be honest, I didn't believe it either - so I sent off an email to morningstar.com and they confirmed my worst fears - 23% is the total growth over 10 years.

Sheesh!

And the average growth of all 1304 funds? A less than impressive 7.3% over 10 years (less than one half of one percent)!

Check out that hiding place under your mattress - at least you don't have to pay exhorbitant fees to keep your money there.

The one certainty is that the Fund Managers will not, personally, have fared so badly - they will still draw their large salaries and enjoy all the benefits of charging you fat fees for their "professional expertise"

As Thomas Sowell wrote:

"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong"

OK, I know not everybody has money "tied up" in Mutual Funds and some people prefer the higher returns of the Stock Market.

So what about the analysts and stock brokers?

Well, we all know about Enron and the others - the stocks in the early 90s that crippled so many of America's biggest pension funds.

Use the TriggerSystem link (shown below) to view the Enron chart screenshot, which is lower down the page (below the Morningstar.com screen shot).

You'll see that on 20 November 2000 there was a "technical sell signal" flagged for Enron when it was trading at just over $80 per share (don't worry about the term "technical sell signal" - it just means a sophisticated trading programme told it's owner that he should SELL).

Over the next 2.5 months, Enron's price fluctuated up and down without really going anywhere, until the middle of February 01 when it really started to slide (just as it appeared to have stabilized at $80).

As they say, a picture is worth a thousand words, and to save my typing fingers - the numbers speak for themselves.

Follow the chart to the right and you'll see that the major stockbroking houses and analysts were still saying "BUY" as the market lost 75% of it's value over the next 9 months.

It was only on October 19th 2001 - just 11 months after our "technical sell signal" that the first warning appeared from the Brokers and Analysts - and even then there was a further major BUY reccommendation before Enron slipped again to be worth less than 40 cents on 30 November 2001 - A decline from $80 per share to $0.26 per share in 12 months!

And all the time the major brokers and analysts were telling their ordinary customers to either Buy or Hold.

And as we later found out, the Brokers and Analysts were telling their biggest corporate customers a totally different story.

So, whilst the Stock Market is your best friend (trust me on this one, or look for my previous article) - the people who operate it may simply be their own best friend, and from your point of view, any advice you receive from them should be taken with a very large pinch of salt.

And if you still think you can trust the advice they give you, here's the simple "5 word question" I mentioned at the beginning of this article... Ring them and ask: "What Guarantee Do You Give"? Just pick up the phone and ask them about the guarantee they give you regarding their advice.

Once they've stopped coughing and spluttering and picked themselves up from the floor, you may hear this well worn mantra: "the value of stocks can fall as well as rise" etc etc.

If they're not prepared to guarantee their advice, then frankly their advice is not to be trusted.

More next time...

Geoffrey Cummins is a full time stock market trader and has spent the last 12 years developing what he calls his "weedy little spreadsheet trading system", giving him some unique insights into the working of the world's stock markets. Under pressure from friends and family, Geoffrey is now making his unique insights and trading signals available to a worldwide audience

And unlike your stockbroker, he guarantees you a minimum 300% return on your investment (ROI) click here to view the charts referred to in this article

No wild claims, just common sense advice and the best Risk Free Trial (a full 90 days for less than $5 a week) on the internet all backed up by his unique 3 part / 300% guarantee.

If he doesn't provide you with a minimum return on your investment of 300% (the banks best offer is 3%. Not guaranteed) - he'll give you your money back. No questions asked. click here to view the charts referred to in this article

no-contract cleaning service Glenview ..

In The News:

A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.

South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.

Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Fake AI apps disguised as "ChatGPT" and "DALL·E" are flooding app stores with dangerous malware that steals data and monitors users without detection.

Fake buyers demand specific vehicle reports from unknown sites to steal credit card information from car sellers, but warning signs can help identify these scams before paying.

Android users can now manage apps across multiple devices more easily with Google Play Store's updated remote uninstall button in the latest update.

NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Holiday scams spike during Black Friday and Cyber Monday as criminals exploit your leaked personal data. Learn how to protect yourself from fake stores and phishing.

Commerce Department proposes TP-Link router ban over Chinese security risks. Learn how this potential prohibition could affect your home network and devices.

Hyundai AutoEver America suffered a data breach affecting 2,000 current and former employees, exposing names, Social Security numbers and driver's license information.

Washington court rules automated license plate reader images are public records, even when stored by vendors like Flock Safety, setting precedent for transparency.

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

Fake Geek Squad invoice emails are targeting users with convincing charges and urgent phone numbers to steal personal information and money.

Fox News Digital's artificial intelligence newsletter digs into a robot in Russia that faceplanted, George Clooney's alarm and OpenAI's rivalry with the New York Times.

Major data breach at Conduent exposes personal information of 10+ million people. Government contractor hit by cyberattack affecting Medicaid, child support systems.

Texas startup Janta Power raises $5.5M for innovative vertical solar towers that generate 50% more energy than traditional panels while using just one-third the land.

NASA's twin ESCAPADE spacecraft launched aboard Blue Origin's New Glenn rocket Thursday afternoon from Cape Canaveral, beginning their journey to Mars with arrival expected in 2027.

Learn how to set email reminders on iPhone and Android so you never forget to reply again. Simple built-in features help you stay organized and on top of messages.

Discover how Apple's passkeys revolutionize Mac security by replacing vulnerable passwords with biometric authentication and encryption for ultimate protection.

New survey reveals 78% of parents fear AI scams targeting their kids, yet nearly half haven't discussed these threats. Learn why this dangerous gap exists.

The Stock Market - How Just One Question Will Tell You All You Need To Know About Your Stock Broker

Stocks & Mutual Fund