Why Investors Use Financial Planners
Do you have a financial planner? Does one of your friends have a financial planner? Maybe you take your advice from your broker. As I have said countless times before a broker will make you broker. And a financial planner won't do any better. I know. You thought they would.
Let's look at the real reason investors choose to take advice from these so called "experts". Once they get you into their office or sitting with you at the dining room table or kitchen table you are doomed. Mr. F.P. has come prepared with beautiful slick color brochures and will have a presentation that will utterly confuse, bedazzle and befuddle. You will sit there and be afraid to ask a question because you know it is so dumb. You can't say 'no' or you will be admitting how dumb you are. And he knows that.
It is not that he is a liar. (I hope.) It is that all financial planners and brokers are taught the Wall Street method of "making money". Unfortunately it doesn't work.
The basic things that have been pounded into their heads are false. Let's look at the big three: Do Research, Dollar Cost Average and Buy and Hold. There are others, but these you will hear from every broker and financial planner because that is what the big brokerage companies and mutual fund families want. They want your money and they want to keep it even when the stocks or funds you own go down. In fact, buy some more.
Research is like blowing in the wind. You will be inundated with green sheets, blue sheets, red sheets, slick full color glossies, videos, etc., etc. Think about this. If you can obtain this information then so can everyone else. Everything that is known about a particular stock is reflected in the last price. Morningstar will sell you a beautiful package about a company, but it is worthless. What you really want to know is will it go up after I buy it?
Of course, if it goes down you will be encouraged to buy more to average out your price so that when it heads up again you will make a fortune. Yes, and pigs can fly.
If it does go down your advisor may say to hold on as the market always comes back. He doesn't tell you it may take 20 years or that the company might go out of business. Buy and Hold is the greatest myth of Wall Street. No one ever tells you to sell. Have you been told you don't have a loss until you take it? Please!
You got that advisor because you have not admitted to your self that you cannot pull the trigger. When you have a stock or fund that is falling you don't want to sell. You have to take charge of your money. Just you.
When you look back at the performance of most financial planners from 2000 to 2003 you know you can do a better job. Always ask to see what they did then. If they lost money you don't want them. Don't let them compare their performance to the S&P500. That's smoke and mirrors.
You can do better. Just do it.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005.
More Resources
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exitingMore Stocks & Mutual Funds Information:
Related Articles
Jack and Jill
Jack and Jill went up the hill to fetch a
bucket of ?money. Money? They are continuing
to fill their bucket with stocks without any
consideration to the value of these equities.
The Problem With Hedge Funds
Are hedge funds a suitable investment for you? Hedge funds are an appropriate investment for qualified purchasers with a net worth above one million dollars and an annual income exceeding two hundred and fifty thousand dollars. Purchasers are often required to sign an acknowledgement confirming their qualifications to invest in hedge funds.
Invest, Be Wrong, and Make Money in the Stock Market
I have been trading for several decades and was an exchange member and floor trader for 17 years. You learn fast there or you go broke in a hurry.
Stock Market Investments
If there is one term over-used when talking about making investments in the stock market I would think that term would be: buy low, sell high.Buy low? Sell high? How low is low and how high is high? I like the term buy low, sell dear, much better! But better still are the terms buy and hold, and dollar-cost-averaging (buying the same stock at different prices through the years).
Managing Investing and Stock Market Risks
Reduce your investing and stock market risks by:Setting your sights on the long term, patiently riding with the ups and downs!If you have the time to be patient, you can benefit from time diversification. The more numerous good years for stocks outweigh the bad, pulling your return up.
Mousetrap
The spring-loaded rat catcher is the ultimate low-tech device invented more than 100 years ago and remains the best demouser in the world. It is so simple anyone can master it and best of all you can keep on using it year in and year out.
Eternal Sunshine
There is a current movie entitled "Eternal Sunshine of the Spotless Mind". It is about a man who has had a painful love affair and will do anything to rid his mind of those pain thoughts of a former love.
Understanding Stock Market Indexes
A stock market index is a statistical measure of changes in the securities markets. An index represents a portfolio of securities traded on the market that is considered to be reasonably representative of the market as a whole.
Pension Plans
If you have a pension plan at work you will want to read this and if you don't you will still want to because it affects your retirement account.There are two kinds of formal retirement plans that are set in place by employers.
Struggling Stocks, Booming Commodities
04/28/2005NASDAQ dropped -12.5% year to date in 2005.
Investing in Stocks and The Game of Monopoly
To begin, you might look at playing the stock market as though you were playing a game of Monopoly. That's right; for playing the stock market 'game' is not unlike playing a game of Monopoly.
Again With the Bubbles?
A few years back - it seems like an eternity today - the U.S.
Stock Trading Secrets?
How often have you come across an advertisement or e-mail proclaiming to "teach" you the stock trading secrets that Wall Street Insiders don't want you to know? Usually included in the descriptions of these trading products are claims such as "Make 10K monthly in minutes per day", or "Learn the secrets of Professional Stock Brokers", etc. etc.
Valuation
Every day I hear from the "experts" on CNBC-TV and the radio gurus that the way to buy stocks is find value. One man's Rembrandt is another man's connect-the-dots and fill in the spaces.
Big Buildings Can Mean Big Economic Disaster
AS BUILDERS BEGIN WORK ON THE FREEDOM TOWER in New York City, to be the world's tallest building, economist Mark Thornton offers a history-based theory of the relation between super-buildings and the economy. Thornton surveyed economic performance worldwide following the completion of each of the world's tallest skyscrapers, and suggests what these events foretell.
Municipal Bonds
Because there are so many stocks that are NOT paying dividends and also going down people are looking for a safe investment that will pay a decent return and also won't lose money. Slowly folks are beginning to think about bonds of which there are all kinds.
Nest Eggs and Omelets
Do you have a nest egg? You know, a place you are stashing away money for the future - retirement, down payment on a house, the kids education. That kind of thing.
Stock Market Education; Day Trading for Beginnners; How to Pick Stocks
The trading method you employ to approach the stock market can make a big difference in your results.Stock trading is a very competitive field and in order to succeed you need to FOCUS on a set of simple strategies that you can implement without hesitation.
Analyzing Growth Stocks: An Important Focus For Any Investor
Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find.
Whitewater Stock Market
Ever done any whitewater rafting or canoeing? Long periods of tranquil river followed by short periods of terror. Suddenly the water grips your vessel and you are pushed and shoved by massive currents over which you have no control.