Addington Financial Group

For Your Information

Why we prefer funds

Behavioral finance demonstrates that all investors are hard-wired in certain ways that greatly increase the probability they will make poor investment decisions.

Skilled, experienced professionals with a disciplined approach, however, are less likely to make the same kinds of decision errors as individual investors. Fund managers have more experience and better resources. It is also true that managers are mediocre as a group. But the best ones have spent years acquiring skills, expertise and a historical framework that is difficult to replicate.

While the Internet has greatly increased the amount of information available, having the information without context, judgment and experience doesn't make one better at stock picking. And the pros have advantages that the Internet can't equal:

better access to company management
more analytical firepower
better databases

All of this helps them understand the positives and negatives facing a company and how those forces will impact a stock.

Contrary to what many argue, it isn't as simple as "buying what you know". There isn't any guarantee that what you know has any bearing on a company's investment appeal.

Valuation work is also complicated. Do you know how to mark tangible assets to their true market value or implement a multistage dividend discount model? Probably not and why should you? Most of us don't know how to do a coronary bypass or operate a backhoe. That's why we hire someone who does.

Funds are not without problems, and expenses are one of them. Because expenses are one of the few certainties in investing, we are strict in avoiding funds with high expenses. Investing successfully in funds doesn't depend upon the success of the entire fund industry. It requires finding and staying on top of a number of good funds with genuine management talent and paired with suitable asset-allocation targets to keep a portfolio out of trouble by providing balance and diversification.

Beware of thieves!

Identity theft is a growing problem. Do you know how to keep your personal and financial information safe? Or what you should do if you suspect someone is already using this information?

Tthe U.S. government's ID Theft website provides tips for minimizing your risk and what to do if you are a victim.

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Contact Informaton : Mailing Address: P.O. Box 143 Winnsboro, TX 75494 Phone: 866.220.7788 Fax: 214.242.2442
laura@addingtonfg.com