The financial world promotes many manipulated stats. But where does the truth lie?
One of the myths out there is the myth promoted by stock indexes. You know the ones, quoted on your daily news--TSX (Toronto), Dow Jones (New York), S&P 500 (U.S.). The news appears very good these days--indexes are up substantially over the past year.
BUT, these indexes are manipulated (I know, you're shocked). If you want to know how a market has performed, you need to know how much the entire market has changed (not just a selection of high-performing stocks), over a period of time, compared to inflation. This is the only way that your investments can increase in value.
So, here's a tidbit that you should be aware of: if you take ALL the stocks on the New York stock exchange, and look at their performance:
THE NEW YORK STOCK EXCHANGE HAS NOT INCREASED OVER THE PAST 13 YEARS!
It has gone up, and gone down, and then gone up again (we call that Volatility), but compared to inflation: nada, zero, bupkus. By the way, Risk is a function of when you can put money in and when you will have to take it out compare with that volatility.
Any financial plan requires planning for reality (including Risk and Volatility), not with puffed up indexes and shiny brochures, which are really marketing tools.
Have you got a real plan for your financial future that can withstand reality?