Capital markets build wealth.
Rather than trying to outguess the market, let it work for you.
Markets throughout the world have a history of rewarding investors for the capital they supply. Companies compete with each other for investment capital and millions of investors compete with each other to find the most attractive returns. This competition quickly drives prices to fair value, ensuring that no investor can expect greater returns without bearing greater risk. Traditional investment managers strive to beat the market by taking advantage of pricing "mistakes" and attempting to predict the future. Too often, this proves costly and futile. Predictions go awry and managers miss the strong returns that markets provide by holding the wrong stocks at the wrong time. Meanwhile, capital economies thrive — not because markets fail but because they succeed.
The futility of speculation is good news for the investor. It means that prices for public securities are fair and that persistent differences in average portfolio returns are explained by differences in average risk. It is certainly possible to outperform markets, but not without accepting increased risk. When you reject costly speculation and guesswork, investing becomes a matter of identifying the risks that bear compensation and choosing how much of these risks to take. Financial science identifies the sources of investment returns. Northstar Financial Planners provides the strategies and experience that gives you the opportunity to achieve them.
For the eighty years from 1926 to 2006, the compound annual growth rate of return was 11.86% for the Small Cap Index, 10.43% for the Large Cap Index, 5.43% for the Long-Term Government Bonds Index, 3.72% for the T-Bills and 3.04% for Inflation (CPI). Large Cap Index is the S&P 500 Index®; Long-Term Government Bonds Index is 20-Year US Government Bonds; T-Bills are One-Month US Treasury Bills; Inflation is the Consumer Price Index. Small Cap Index provided by the Center for Research in Security Prices (CRSP), University of Chicago. The S&P data are supplied by Standard & Poor’s Index Services Group. Bonds, T-Bills and Inflation provided by © Stocks, Bonds, Bills and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work of Roger G. Ibbotson and Rex A. Sinquefield).
Indexes are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Compound returns have an assumed rate of return, are hypothetical and are not representative of any specific type of investment. Standard deviation is one method of measuring risk and performance and is presented as an approximation. Past performance is not a guarantee of future results.
At Northstar Financial Planners, we see markets as an ally, not an adversary. Rather than trying to take advantage of the ways markets are mistaken, we take advantage of the ways markets are right — the ways they compensate investors. The firm designs portfolios to capture what the market offers in all its dimensions. Relieve the stress and confusion of investing with a clear and empirical approach to wealth management.
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Phone: (954) 693-0030
Toll Free: (866) 229-1356
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