Be the Master of Your Own Money

The most successful investors are often the ones who are comfortable making their own choices. [Shield] AN OXFORD CLUB PUBLICATION [Wealthy Retirement]( [View in browser]( SPONSORED [Cancer shocker] Cereal for breakfast? There's a city in northern Europe where cancer rates are [4X LOWER]( than they are here... And researchers have traced it back to [what they eat for breakfast](. See what this popular cereal can do to cancer cells right here: [1 common breakfast cereal reprograms cancer cells?]( The cancer-fighting secret in this cereal used to be on every breakfast table in America... until it was abandoned for something more "convenient." [See it here.]( [FINANCIAL LITERACY]( [Be the Master of Your Own Money]( [Marc Lichtenfeld, Chief Income Strategist, The Oxford Club]( [Marc Lichtenfeld]( One of the most common questions I receive is "Should I invest in individual securities or a fund/ETF?" I'm a believer in buying individual stocks and bonds, but for investors who don't have the time or desire to research individual opportunities, exchange-traded funds (ETFs) and other funds are a decent - but often not amazing - alternative. Many passively managed funds are tied to broad indexes. As a result, they will never outperform those indexes. But because the market goes up over the long term, investing in index funds is a safe, "set it and forget it" strategy. So if that's what you prefer, index funds are one method you could use. Most of the time, I don't recommend investing in actively managed mutual funds or ETFs. They have a long history of underperforming their indexes. For example, if you're interested in a biotech fund, stick with one that invests according to a biotech index, not one that's run by a fund manager who's trying to pick winners by "trusting their gut." According to the most recent data, over the past three years, 66% of mutual funds failed to beat their benchmark index. (Maybe you'll get lucky and pick the 1 out of 3 that does, but the odds aren't in your favor.) Furthermore, you pay fees for that underperformance. In fact, the fees can be a reason for the underperformance. If you're paying a mutual fund 1.5% per year, you're starting out 1.5% behind the index. Index funds and ETFs typically have very low fees, which is another reason to stick with them if you do choose to invest in some kind of fund. But as I said, I believe owning individual stocks and bonds is the way to go. You pay no fees for buying and selling stocks at most brokers. And with bonds, the fee is priced in. So if you want to buy a bond that's quoted at $99, that's what you'll pay. Most brokers will not charge an additional fee, though there are exceptions, so be sure you understand what commissions your broker charges. SPONSORED [What Would You Do if You Could Predict Future Prices... For ALL Major Stocks?]( [AI trading analysis.]( We hired a team of 36 data scientists, software engineers and investment analysts... spent over $18 million... and put in more than 50,000 man-hours to develop the most cutting-edge financial innovations on the market. Today, we're offering you access to our most powerful discovery yet - a breakthrough AI bot designed to help you predict future stock prices with uncanny accuracy. ([See the proof here.]( No doubt, this will be the AI technology everyone is talking about in 2024. So if you want a first-mover advantage, I urge you... [Go here now.]( The main reason I prefer individual stocks and bonds to funds and ETFs is you have more control. If a stock is going against you, your stop can get you out before you suffer a big loss, and the decision to sell doesn't involve any emotion. But with an index fund, that stock will stay in the portfolio as long as it remains in the corresponding index. And with an actively managed fund, a Wharton-trained fund manager may believe they know more than the market and ride the stock down further - or worse, throw good money after bad. When you own stocks, you can also take profits when it's appropriate, whereas with a fund, you have no control or say over what the fund manager does. I feel even more strongly about holding individual bonds than I do about holding individual stocks. There are some exceptions, such as a closed-end fund trading at a steep discount or an ETF that invests in convertible bonds, but these can be tough for individual investors to find. For the most part, when it comes to regular corporate and government bonds, you should own them individually. That way, you can decide what maturities make sense for you and you will know exactly how much cash you'll have available on the maturity dates. (Bonds have become quite popular right now, and rightfully so. I recently told George Rayburn, our longtime event host here at The Oxford Club, that [no matter what the Federal Reserve does next, it'll be good for bondholders]( With a bond fund, however, there is no maturity date and your capital is at the mercy of the markets. You may think investing in a bond fund is safe and conservative, but if rates spike, you'll lose money. And if you withdraw your cash during a period of higher interest rates, you're going to end up with less than you started with. That's the opposite of what we want to see when we invest in bonds. We invest in bonds for safety. We know we'll get our money back at maturity - or make a capital gain - because we know the bonds will mature at par value ($1,000) no matter which way the bond market or interest rates move. We'll get $1,000 per bond at maturity regardless of whether we invested $1,000, $900 or $1,050. Funds and ETFs serve their purpose, mostly for investors who don't want to (or are afraid to) make their own investment decisions. But investors who feel comfortable making their own choices and investing in individual stocks and bonds are likely to be better off in the long run - as long as they don't overtrade and don't try to time the market. Good investing, Marc [Leave a Comment]( [Investment U Conference 2024 at the Ojai Valley Inn & Spa in Ojai, California, February 26-29, 2024]( RECOMMENDED LINKS [Is Your Portfolio at Risk Because of the Imminent $21 Trillion Meltdown?]( [One Potentially Explosive Stock That Alexander Green Just Discovered Has Seen Five-Year 2,000% Revenue Growth, Enjoys 70% Gross Margins and Sports a Debt-Free Balance Sheet, yet Still Trades Under $10. He's Calling It the "Next Great American Super Stock." 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