Buy and Hold VS Active Money Management

Posted January 27, 2011 by admin. tags:Tags: , , , , , , ,

Paragon Wealth Management’s President, Dave Young, discussed his opinions on buy and hold versus active money management on Paragon TV today with Paragon TV’s host, Randall Paul.

“It has often been said that the wisest investor buys a good stock and holds it,” asked Paul. “Dave, how do you feel about that very broad generalization at Paragon?”

Young said buy and hold is a very simplistic way to invest. He continued to say that he has never trusted the markets enough to put his money in a buy and hold strategy. He calls it buy and hold, hope and pray.vv

“The most difficult part is deciding when to sell,” said Young. “That is the cop out with buy and hold because you buy it, hold it and hope it bgall works out.”

Young said in his mind there are two groups of investors. One group claims that active money management is the only way to invest. The other group believes buy and hold is the best.

“We’ve outperformed the buy and hold strategy over the years at Paragon Wealth Management by being active money managers,” said Young. “There were only four years where our growth portfolio underperformed the S&P 500 out of 13. During those 13 years, our average return in our growth portfolio was 13.34 percent net of fees.”

Young said the reason he is not sold on buy and hold is because he is not willing to just blindly suffer the huge draw downs that an investor can with a buy and hold investment strategy. He prefers active management because it gives him a sense that he has more control in his portfolio to possibly mitigate the downside risk.

Watch the video above to learn more. 

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax advisor and should only be used in conjunction with his/her advice.

How You Can Avoid Financial Scams

Posted January 20, 2011 by admin. tags:Tags: , , ,

Once you understand how the Bernie Madoff scam worked, you will be a better investor.

In the Bernie Madoff situation, the investment advisory side and brokerage side of the business were both owned by Bernie Madoff. They had full control of the investor's assets. It is not a good sign when an investment advisor has full control of your assets. If they have full control, they can withdraw your money, make up statements, etc. It is important to have the custodian of your accounts be completely independent from your financial advisor.

There are a whole litany of scams out there. One thing you can do to avoid some of them is to never write a check directly to an individual advisor or business. If you do this, you are setting yourself up for a scam. If anyone asks for a check written directly to them, it is a red flag.

Watch the video above to learn more.

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Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax advisor and should only be used in conjunction with his/her advice.

 

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