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Advisor
CARES Assessment |
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WHAT SOLUTIONS PROVIDE THE BEST VALUE
This illustrates just how important it is to understand what factors impact investment results and what it means to your clients. With this knowledge, there are few surprises, and you can compare various investments based on historical performance to help your clients make more informed investment choices. It is important to remember that past performance doesn’t guarantee future results. However, it does provide valuable perspective. ValueMeterTM, a proprietary service we offer, is an objective, easy to use, yet comprehensive computer program designed to simplify these complex issues and calculations and helps you evaluate and compare investment products. Is having this type of investment analysis tool important to you? |
Your
clients' investment results are determined by more than just performance.
“Performance” is the starting point. From there, you must consider
the length of time a specific amount of money will be invested and
then deduct the expenses related to managing their money. Remember,
every investment has expenses. Expenses are either not disclosed,
partially disclosed or fully disclosed. From that performance amount,
you must deduct taxes (either now or in the future). Then, you must
adjust for inflation. For example, if you have a $10,000 CD and it
earned 4% (net of expenses) on average for 30 years, you would have
$32,400. If you’re in the 25% tax bracket and inflation averaged 3%,
the real value of the CD at the end of 30 years would
be only $13,400. This is an actual gain of only $3,400
on a $10,000 initial lump sum investment over 30 years!
This represents an average annual rate of return of .9%.
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