Happy Sunday! Here’s what we’re covering in today’s Clark Smart Investing newsletter:
Can you pick a “good growth” mutual fund?
Does the “hedgehog” beat the “fox” in investing?
What is a bond ladder and should you build one?
Q&A with Wes Moss: Lump sum vs. monthly pension: What should I do?
💵 Can You Pick a “Good Growth Mutual Fund” Like Dave Ramsey Says You Can?
Dave Ramsey’s investing pitch is built on a simple premise: Find mutual funds with long track records that have beaten the market, split your money four ways (across growth and income, growth, aggressive growth, and international), and you’ll outperform the S&P 500.
It sounds reasonable. A fund that has beaten the market for 10 or 15 years must have a manager who knows what they’re doing, right? If skill is real, it should show up in the numbers.
The problem is that the numbers say something very different. The data on mutual fund performance is some of the most-studied data in finance, and the conclusion is consistent across decades, geographies, and methodologies: Past outperformance is a poor predictor of future outperformance. In many cases, today’s winners become tomorrow’s laggards.
Most investors think they can beat the market by choosing funds with the best 10-year track records. But financial experts warn that "past performance" is one of the most dangerous metrics to follow. In the full article, learn the three structural forces working against active managers and the strategy style that is statistically proven to grow your nest egg faster.
📚 Recommended Reading
Stop "out-foxing" your own retirement! Many investors act like the “fox,” but the "hedgehog" wins by sticking to one simple, powerful strategy. Find out how overcomplicating your investments usually leads to higher fees and lower returns, and why doing less is often the secret to building more wealth. Read more.
Want a predictable paycheck in retirement without the market stress? A bond ladder is a simple, "old-school" strategy that gives you steady income and more control over your cash than a standard bond fund. Read more.
Sponsor
It’s common to question whether life insurance is still necessary as retirement approaches. But canceling a policy too soon, or without a clear plan, can have unintended consequences. This guide walks through what to consider before making a final decision.
💬 Ask an Advisor
Do you have a question about your pension options? Use our Pension vs Lump Sum Calculator to see which option actually puts more money in your pocket over the long haul.
✅ Poll: What’s Your Take?
Every week, we'll ask a new question to get your take on the latest financial trends and topics.
Which best describes your current investing style?
Last Week’s Poll Results
We asked: “What amount do you consider wealthy?” Here’s how you answered:
Under $500,000 - (3%)
$500,000 – $1 Million - (11%)
$1 Million – $2 Million - (29%)
$2 Million+ - (57%)
💸 Money Tip of the Week
Shop your auto insurance: If you haven't shopped your auto insurance in the last year, you’re likely paying a "loyalty penalty" that could be costing you hundreds of dollars in savings. Take 15 minutes to compare quotes — it’s an easy way to give yourself a massive raise today.
☎ Need Money Help?
The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information.
This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Any company names shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
