NEWSLETTER Archive | January 2007 | Issue 2 | Vol. 1

Inside This Issue:

Features

• The O. Report
• Feel Good Market
• The Flight Log
• Looking Ahead at the Chinese Market in 2007

Education

• Monthly Option Strategy: Protective Put
• The Value of Investing Early and Compounding

Investor Tools

• January Economic Calendar

In Every Issue

• Letter from the Editor
• Who We Are
• How We Are Different
• What We Do
• Advisor Profiles

The Value of Investing Early and Compounding

by Mark Fichera

Following study, courtesy of Market Logic, Ft. Lauderdale, FL 33306

In this study, there are two investors of the same age.

• Investor A - Makes no IRA contributions until age 26 (point at which “Investor B” stops making contributions). “Investor A” continues faithfully contributing $ 2,000 every year until age 65. Assumed average annual return is 10 %.
• Investor B - Opens an Ira at age 19. For 7 consecutive periods (until age 26) “Investor B” puts $ 2,000 into an IRA at an average growth rate of 10 %. After 7 years, B makes NO MORE contributions.

Now let's view the results:

“Investor A's” total value at age 65 was slightly more, approximately 3 %. But “Investor A” invested $ 66,000 more than “Investor B”. “Investor B”, who invested only $ 14,000, saw his money grow by 66 fold versus only 11 times for “Investor A”. Those seven EARLY YEARS were worth more than all of “Investor A's” 33 ADDITIONAL CONTRIBUTIONS!!!!

Next Article: The O. Report >>

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Feel Good Market
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The Flight Log
As the 2006 market year comes to a close, the markets have had a great year. We saw the S&P 500 start the year at 1248, and as of this log entry...

The O. Report
Twas the night before Christmas, and to investors’ great glee, the markets were advancing, to new high territory...

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