Newsletter - November 2023

DEAR READER,

WHO KNEW

From my Fact Time calendar

  • The television was invented only two years after the invention of sliced bread.
  • It costs almost $290,000 per year in fees to run a hot dog cart near the Central Park Zoo in New York City [that requires the sale of a LOT of hot dogs].
  • 79% of pet owners sleep with their pets [don’t know why it’s not 100%]
  • MLB umpires are required to wear black underwear in case they split their pants.
  • A bolt of lightning can reach 53,540 degrees Fahrenheit. That’s 5 times hotter than the surface of the sun, which is 10,340 degrees Fahrenheit.
  • According to scientists, the weight of the average cumulus cloud is 1.1 million pounds!

And from my Lubbock Country Club magazine

  • According to the National Hole-in-One Registry, the odds of making a hole-in-one are 12,000 to 1.

BAD TIMING

The average fund gained about 7.7% per year over the 10 years ended December 31, 2022, while the average dollar invested in mutual and exchange-traded funds earned a 6% annual return. That 1.7% gap turns into 17% over 10 years—and it’s the result of the timing of investors’ purchases and sales, according to Morningstar’s annual “Mind the Gap” study, released in late July.

The study compares the average investor’s return on investments in funds and exchange-traded funds and compares it with the average fund’s actual total return, attributing any difference to the timing of when investors bought or sold shares.

Investors in narrower sector equity funds earned only 6.4% per year on their dollar, which was 4.4 points less than the average fund’s 10.8% total return.

On average, the least volatile funds’ dollar-weighted returns lagged their total returns by around 0.9% per year, which was a full percentage point narrower than the gap for the most volatile funds.

The gap for riskier funds, such as alternative funds ranked in the highest volatility quintile by Morningstar, saw a significant gap of negative 15.8% The moral is—investors should throw away their crystal ball, subscriptions to “when to buy” newsletters and brokers who advise on investment timing. To make money in the market you need to stay in the market.

Read more here


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© Evensky & Katz / Foldes Financial Wealth Management

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