New Investors Are
Easily Deceived
by Bill Staton
The Staton Institute Advisory
The
Beardstown Investment Ladies' true investment record has finally been revealed.
As it turns out, the 23.4% annual return they supposedly earned (that shot
them to the top of the best-seller list several times) turned out to be
9.1%, or 61% less than advertised.I
accept the fact that these nice grandmothers weren't trying to pull the
wool over anyone's eyes; they made an honest accounting mistake that fooled
everyone, including themselves. But it was because their methodology was
thought to be so easy and had beat the market by more than a 2-to-1 margin,
that was the premise for writing the books in the first place.There
is so much hype in the marketplace these days about beating the market,
it's easy for new investors to be deceived. The Beardstown Investment Ladies
are but one example.Why
didn't anyone check the facts before their books were published? According
to The Wall Street Journal, neither the book's packager nor publisher
could explain why the "mistake went unchecked for so long."
The producer of their popular video (who subsequently sold the book rights)
admitted he "never, ever thought to check." Pitiful!Two
millionaire gurus of the day, David and Tom Gardner of the Motley Fool,
created real-money portfolios to teach the rudiments of investing. The April
issue of Money says their "boring" portfolio "looks
more like the cardiac-arrest portfolio" because four of the nine
stocks have "suffered meltdowns. The Fools' other portfolios have
mixed records."There's
no substitute for experience, investing on facts, not fiction; dealing with
an advisor with a proven track record in writing, and sticking with highest-quality
companies with growing earnings and dividends.Editor's Note: Bill Staton is editor of The Staton Institute Advisory,
a publication of The Staton Institute, 300 East Blvd., B-4, Charlotte, NC
28203, 1 year, 12 issues, $156.95. Bill Staton also authors The America's
Finest Companies Investment Plan: Double Your Money Every Five Years,
250 pages, $13.95. Staton shows investors from beginners to experienced
-- how to be their own money managers and beat 75-85% of the pros 100% of
the time. Written in everyday language. Call 1-800-779-7175 to order.