The Oxford Club Tells Investors How to Take Three Steps to Higher Returns

The Oxford Club is an independent network of investors from around the world headquartered in Baltimore, Maryland. As part of their educational efforts to help people become more successful and accumulate more wealth, they recently published an informative article on their free Investment U website by Alexander Green, their Chief Investment Strategist.

Green explains the three steps investors can take to increase their returns no matter what happens in the markets. The first one is simply to save more. 24% of Americans have saved less than $1,000 for retirement, according to the 2017 Retirement Confidence Survey. Nearly half of all Americans have under $25,000. Green points out that he was saving money even when he was in his 20s and driving a car with a radio worth more than the car.

The second crucial steps investors must take is to minimize their investment costs. He points out that, in investing, paying more for advice does not get you higher returns. Every year, 3 out of 4 of managers fail to beat their relevant benchmark index, such as the S&P 500. This is all the more frightening when you realize that if chance alone were involved, half of them should beat the benchmark. The fact that it’s only 25% shows that most fund managers are performing worse than chance alone. When the time period is ten years or longer, only 5% of active fund managers beat their indexes. Yet the money you pay them in fees comes out of your returns.

Green’s last step advises investors to rebalance their portfolios periodically. That means cutting down on asset types that have had large gains and buying more of assets that have recently underperformed. When investors do this, they are selling investments at high prices and buying alternative types when their prices are relatively low.

The Oxford Club has over 80,000 members. It also publishes paid monthly newsletters with specific investment recommendations.