Saturday, June 04, 2011

Fraudulent Tricks of Some Investment "Promoters"

Beating the market is easy. Just understate its performance.

Various investment promoters are touting their stock-picking prowess by comparing their returns, including dividends, to the Standard & Poor's 500-stock index without dividends.

It is a lot easier to beat the market when you don't count its entire return. Over the past decade, according to Standard & Poor's, the S&P 500 benchmark gained an annual average of just 0.72% without dividends. But with dividends included, the S&P's total return reached 2.81% annually.

-from a WSJ article by Jason Zweig

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