A Note From the Founder: As 2019 winds down, we’re doubling down on our efforts to help readers make more money. That’s why we’re revisiting this essay from earlier this year on how embracing technology can help boost your portfolio. (It’s led subscribers of our Codebreaker Profits to quick gains of 125%… 146%… and even 300% in a matter of weeks.) Forget making average returns… this new way to invest can send portfolios soaring.
Are you an investor looking to boost your performance?
If so, have you tapped into the industry’s latest technology?
It’s a bit of a trick question.
If you’ve read our work for a while, you know we tend to be a skeptic when it comes to the latest gadget wizardry.
We don’t trust our smartphone. We think the internet is killing society. And who wants a self-driving car that drives itself right into a guardrail?
But let’s not be fools. If we’re fighting cancer… battling an enemy… or trying to communicate with somebody on the other side of the planet… technology ain’t all that bad.
In many ways, the period between 1999 and 2017 was the pinnacle for technological growth.
It not only changed the way the world communicates but also brought us an incredible increase in computing power.
And yet – this is the undeniable part – the average investor hasn’t taken advantage of it.
For all the whiz-bang gadgetry out there, the little guy is still doing things the old-fashioned way.
Can You Beat These Numbers?
The proof we need comes from a study you’ve surely heard us mention before. Every once in a while, the fine folks at Dalbar flip on their computers to calculate the average investor’s annual stock market return.
We bet the figures look familiar… especially if you’re wondering why – despite hard work, smart decisions and regular savings – you still aren’t sitting on millions.
The numbers are sad.
During the same period mentioned above (a time when Wall Street was blessed with the greatest bull run of our time), the average investor earned just 2.6% each year. And the very best are earning just 5%.
The figures are far below the S&P 500’s annual return of 7.2% during the same time.
But why… why does the average guy do so poorly?
The answer is oh so simple. It’s something we’ve looked at a lot.
The typical investor lets his feelings get in the way of his logic. He hears about an Ebola outbreak in Africa… so he sells his airline stocks at their lows. He hears Trump is waging war on China… so he sells his steel stocks at their lows. And he hears AOC is going to save the planet by outlawing gasoline… so he buys Tesla at its highs.
It’s crazy. But we dare you to prove us wrong.
Get this. During last year’s December stock market rout – American investors dumped an incredible $44 billion worth of mutual funds and ETFs. They sold at lows… and entirely missed the highs we’ve seen in 2019.
There’s a better way.
A Manward Kind of Technology
In a world where Amazon can know what we want to buy before we do… where Google can diagnose our sickness before our doctor… and where Facebook can get ahold of us in the grocery store… surely investors can use similar technology to boost their returns.
Surely… there’s a way to get more than just 5% (or less!) each year.
It involves emotionless machines – aka artificial intelligence.
Take the tiny AI Powered Equity ETF (AIEQ), which is up more than 20% this year.
By working like the algorithm that has turned Facebook investors into millionaires and billionaires, it processes more than a million data points with each trade – a feat that would have been unimaginable just a decade ago.
Instead of using emotions to judge the headlines and to make our best guess at where things will head next, artificial intelligence finally allows us to invest entirely on facts.
Mark our words that as this technology gains traction, those figures from Dalbar will soar.
It proves that, for all our disdain of technological “improvements,” there’s been plenty of good progress.
It’s why we cry when we see everybody at a restaurant staring at their phone… and the average investor is still earning less than 5% each year.
You can do better.
It’s finally possible.