Where is the Economy going?

[tw]

Originally posted by xoxoxoBruce
Don't most Mom&Pop investors generally invest in mutual funds? Wouldn't that would give the fund manager the clout to nudge the market?

Only a fool would invest in mutual funds. First, mutual funds are below average returns compared to the S&P 500 averages. Of course. These are expensive money men whose primary interest is themselves and the money games they were taught to play. Second, if investing in a low performance stock instrument, then better to invest ony in index funds which typically only underperform according to the broker's commissions and that typically out perform other mutual funds.

Love those who "play" the market. They leave money on the table that only enriches me. Smart investors look at the product line - invest based only upon the years of that product line. Never invest without planning to be in that stock for years. It is how one makes big bucks.

Successful investors such as Peter Lynch and Warren Buffet do it by learning products - don't play money games. They only invest in companies whose products they understand. For example, MacDonalds made bad food over the past few years. Buffet invested, realized his mistake, and got out quickly. Wendy's made better food which is why Wendy's was a better stock. INtel was clearly making best processors cmopared to competition such as IBM, Zilog, Motorola, and later AMD. Furthermore, their other product lines were routinely successful. That is why Intel was such a great investment.

GM is classic of a bad company. So we look at their stock performance over the decades - since 1971. Notice the S&P 500 average in red rises substantically whereas GM stock stagnates. But then we have more than sufficient information even in the Cellar to see that would be true. GM's long term performance verse S&P 500 displayed - and why only fools invested in GM - because GM has long had bad products: