1.  It's REAL return that matters.

As our portfolio grows, inflation reduces purchasing power.  What matters is the increase in purchasing power or the REAL, inflation adjusted, increase in our wealth.

2.  The Average investor is Average (before costs).

The laws of mathematics say it has to be so.  Therefore, the average investor will earn far below the market, after costs.

3. You are likely to be that average investor, before costs.

An estimated 90% of money is professionally managed (most of it in huge institutional) and uses "award winning research" and sophisticated proprietary models.  Those professionals, including the gurus on CNN are likely to perform as well as blindfolded chimps selecting stocks by throwing darts at the financial pages.  After costs, of course, the chimps will trounce the pros.

Yet it seems like everyone is beating the market.  Let's look at the evidence:

·         Nearly every investment advisor and money manager touts they have outperformed the market.

·         Most individual investors firmly believe they have trounced the market and we've all heard the cocktail party talk of "brilliant" investment moves.

·         Newspaper advertisements of hot mutual funds with Morningstar five star ratings showing how much their performance beat the market.

·         CNBC interviews of the experts who beat the market and parade their brilliant new predictions.

 And to support the above claims, it's only natural to believe that hard work and great research will result in better selection of stocks, bonds, and mutual funds.

How then can nearly everyone be beating the market?  THEY CAN'T!   People believe what they want to believe, much like 80% of drivers who believe they have above average skills.  Yet common sense tells us that the average investor (which happens to be the sophisticated professional)  has to underperform the market by the amount of their costs. 

Beyond logic, the verifiable facts also support this conclusion.  Mutual funds must make performance data public and the data consistently shows that, as a whole, they underperform the market by their cost structure.  In fact, Wealth Logic, LLC has performed its own analysis and found that there is virtually a 100% statistical probability that the culprit is costs.  Yet money keeps flowing into those mutual funds with high Morningstar ratings even though the ratings have been shown to be a poor predictor of future performance.  This is illogical but hot funds are very easy to sell on an emotional basis.

In short, Wall Street makes a lot of money by continuing the illusion of beating the stock market and that is exactly what makes the stock market so efficient.  For the majority of investor's that can't accept the logic above, please know that you have the appreciation of us all for keeping the markets efficient.

IF you can consider weighing the logic and facts to accept the above arguments, please consider the costs and benefits:

Costs

There are many real emotional costs that one must pay to accept this approach, you must give up:

• The dream of getting rich quick.  Not to worry, you can buy the occasional lottery ticket to keep the dream alive.
• The entertainment value of picking stocks and funds to beat the market.  Let's face it, gambling is fun!
• The hope of having cocktail party talk of bragging over recent brilliant investments.  I can assure you that discussing your new investment philosophy will bore most at the party.
• The valuable mental option of taking credit for investment successes and having your investment professional to blame for the failures.

Just because these costs are emotional doesn't mean they are not real - they are very real!

Benefits

Successful implementation of the Dare to be Dullsm approach will grow your portfolio at least 50% faster than the average individual investor, on a risk adjusted real (after inflation) basis.