The stock market can be risky, changing dramatically in hours or minutes and it can be difficult to know what stocks to buy.  The returns can be good if you are lucky and know when to get in and out, but how many of us have the time or knowledge it takes to truly understand the market enough to win?

The problem is returns are up and down, sometimes way down.  Many factors that drive the market are hidden and out of your control.  Falsely reported earnings, CEO’s throwing million dollar parties with company funds, and fraud can turn your once winning investment into a penny stock overnight.   

Let us look at the tricks of averages.  The market claims an average return of between 10-11%.  But does this mean you really average this?  Say over a 3 year period you see one of the following:

All of the above reflect a simple 3 year average of 10%.  But does your account reflect a 10% average?  Your account should show a return of $331 or a total account balance of $1,331 on every $1,000 invested in an IRA (see Deeds of Trusts above). 

Now that is if your return reflected the true simple average, but it does not.  Let us look at the average of the Dow Jones over the 10 year period of 1997-2006.

Now when I first looked at this I was impressed and a little shocked.  Because looking back at the early part of this century I remember my stock account going down a lot more than 6 or 7%.  It was more like 60 to 70%, but that was me. At first glance they fooled me and maybe you because the Dow only averaged 7.807% for this 10 year period.  Now here is the shocker that you may not know.  If you were in a Dow Jones Index Fund you would have not averaged 7.807% it would have been lower than that. 

THE SHOCKING RESULTS ARE THE DOW JONES ACTUALLY RETURNED $1,932.66 COMPARED TO $2,120.66 IF IT WAS A STEADY 7.807 PERCENT RETURN.  OF COURSE A RETURN LIKE THAT OF DEEDS OF TRUSTS OF 10% OVER THIS SAME TIME REACHES AN AMAZING $2,593.00.

(Click to enlarge)

Don’t worry we are not stacking the numbers.  With the simple average return of the Dow and the 10% return of deeds of trust, deeds of trust still win over the past 20 years.

Did you realize if one year you took a 20% loss you will need a 50% gain the next year just to get you back to the 10% average.  We have all seen the 20% loss a lot more than the 50% gain.

This is why deeds of trusts beat the market every time.  You can have the same average returns of the market without the sleepless nights.

Prove it to yourself!  Take some time and review your accounts and see if you were able to even average the 10% that they claim.  Most people will be surprised that they never have.

STEADY RETURNS WITH A KICK. WHY DOUBLING YOUR RETURN IS IMPORTANT. Do you enjoy working twice as hard, would you like to enjoy more of life and the fine things others have?  Then click here for some important info.