Why Invest

Why People Invest

For most people the three principal reasons to invest are:

1. To live a comfortable retirement.
2. To pay for the college education of their children or grandchildren; or
3. To accumulate and preserve as much wealth as possible to meet future financial goals.

Why Stocks Are your Best Alternative

A well diversified portfolio of stocks gives you the best chance to create, grow, and preserve significant wealth over time and meet your goals. The key is to invest consistently and manage those investments intelligently.

• Over time, the total return on stocks has exceeded that of any other asset class.
• As measured by the S&P 500 Index, stocks have produced average total returns of 10.51% per year from Jan. 1926 through Sept. 2007.
• With such results, $1,000 dollars invested in the S&P in 1926 would have grown to $3,074,984 by 2006.

When someone invests in stocks, they are essentially buying a share of all future profits of that company for as long as she holds the stock. The stock can provide profits to its owner in two ways: Through dividends and through capital gains. For instance, a share of stock in the Coca-Cola Company (KO) has paid a dividend to its shareholders each year since 1992, starting at .28 cents and growing each year to 1.36 in 2007. In addition, the market price of the stock could increase each year (or decrease) resulting in a capital gain (or loss) when it is sold.

Sample investment of $10,000 compounded annually for 5, 10, 20 and 30 years.

Investing in stocks is different from saving because no return is guaranteed- in fact the value of your original investment will fluctuate and you could lose money. However, it’s hard to imagine how one can achieve its long-term goals without taking some risk.

Why Invest with Simple Capital

Simple Capital offers professional money management strategies designed to help you achieve your long-term financial goals without taking undue risk. Our mission is to help clients accumulate, grow and preserve wealth while taking low risks. The main differences between us and other managers are:

• Aligned Interests

  Our personal assets, as well as assets from family and friend, are invested in the same companies and with the same strategy as our client’s assets. We drink our own medicine.

• Disciplined Investment Approach

  We invest only in businesses we can understand, and only when our own research indicates that their shares are significantly below our conservative estimate of their true value.

• Independent Thinking

  We invest based solely on our own research and analysis of individual companies, without regard to stock market fads or fears.

Our investment objective is to produce long-term investment returns superior to that of the stock market in general as measured by the S&P 500 Index. While we can’t guarantee results, we guarantee that our investments will do only as well as yours.