When I was a trader, I would have been fired if I tried that. Individuals are no better. Why does nobody talk about performance?

It is a dirty secret that opens all kinds of questions. First, what is annual outperformance? It is beating the S&P on the funds you had invested after subtracting the money you added that year. No, it is not how much your portfolio rose in the year which is what most investors think. You need to separate the market performance from your performance. Since you have the option of buying the S&P, you have to outperform the S&P to make money on your decisions.

Almost everyone doesn’t talk about performance because 85% can’t beat the S&P and the ones that do only beat by about 2%. Instead financial firms tell stories about new products that will help you. No, for 70 years they have not.

Most financial advisors are relationship centered. Their primary purpose is to keep you as a customer. After a long relationship the financial firm will own as much as 20% of your savings and in return you will have underperformed the S&P by 5% per year. On your own you can buy the S&P, pay no fees, and have 5% more per year. Financial advisors can’t talk about that even though they are fiduciaries.

The problem is greater than just performance. Someone has to buy all this stuff that underperforms. About 85% of all the investment possibilities underperform the S&P.

Almost all portfolios have drawdown in major market corrections. The question is do you want mediocre performance with drawdown or do you want phenomenal performance with more drawdown. Drawdown is not a loss unless you sell. “Earn Twice the S&P” describes a buy and hold strategy that will provide you a way to have much better performance than just owning the S&P.