Happy New Year! Despite uncertainties stemming from COVID and inflation, we had a weighted average return for our 8 funds of 17.77% in 2021. In our last email, we talked about the L.O.R.D.S. Strategy, how we invest in mutual funds. Below is a synopsis:

Longevity – Funds have to be in existence at least 25 years.

Opportunity – Fund’s recent returns are underperforming its lifetime return. Usually making it a better opportunity than a fund whose recent returns are outperforming its lifetime return.

Returns – Funds historically have annual returns ranging from about 12% to over 16%.

Diversity – Funds recommended are specific sectors and unique funds among different industries. Average Fund owns 61 different stocks.

Stability – Since 1985, if invested evenly in all these funds, there were 32 years of positive returns with only 5 negative return years. The 5 negative years averaged -12.18%. During the same period with the 3 indexes (S&P, Nasdaq, & Dow Jones) there were 31 years of positive returns with 6 negative return years averaging -16.28% each year.

While past performance is not indicative of future results, we still look at a funds’ history as the most significant indicator that we have to go on. That is why Longevity is so important. With 37 years of history, we are able to look back and see how our funds did during Black Monday, the Kuwait War, the impeachment of Bill Clinton, the Dotcom crash, 9/11, the Afghan War, the Iraq War, 2008 financial meltdown, Trump winning, being impeached twice, and Covid. Over that time period, our portfolio of funds has averaged 92% up years with over 14% returns. That means you would have doubled your money about every five years while going down less on average in a down year than the markets and recovering in about half the time.