The Wonderful World of Investing

There is a pervasive philosophy in the brokerage and investment establishment that they have all the answers. Somehow they would have you give them a blank check to invest based upon their ideas and you would magically achieve your financial goals. Please don’t mention however that the investment community has a very vested interest in your money and on many occasions will make much more than you.

We grant these folks a license to prosper on our fortunes on the promise of great things to come. We charge on down the road winning and losing in the magnificent game of investing while those in charge of the process smile all the way to the bank. Why are we so na├»ve? Don’t we realize that this is a game? We are sold on a process. A formula for asset allocation, sector analysis, broad based diversification, EFT’s, Index Funds, managed accounts, on and on ad nauseum!

If there is one thing that fry’s my posterior more than a flame three feet high, it’s the first saying your taught in brokers school 101, “Don’t worry, it will come back”. Please tell me you if you’ve ever heard that fairy tale before. Number two, nothing in writing. Next time your broker tells you how an investment will perform have him or her put it in writing on company stationery and sign it!! That will be fun!

Certainly, some times they are right. Sometimes they are wrong. How soon we forget JDS Uniphase, Global Crossing, PMC Sierra and what about Ford? All but Ford lost over 90% of their value and never recovered! As a broker for the last 26 years, Ford and GM bonds were the stalwarts… the go to bonds for yield and value. A household name to be trusted. There have been many winners along the way; Dell, Microsoft, Berkshire Hathaway just to name a few. I mention two technology stocks as winners since I listed the other technology stocks above as losers. What does all this mean? Why the rant on brokers and the investment community? In my almost 35 years as a top producing investment advisor,

I have had to fight every step of the way to do the right things. You wouldn’t think it would be so hard since I was always one of the top ranked advisors. Ever time I tried to sell products that had a high degree of safety; I was met by resistance and criticism. Sell more risky investments! Put people into fee based managed accounts! Stocks are the way to go as well as growth based aggressive, mutual funds! And Bonds, oh yea Bonds… wow… these are a gift from heaven. Let’s buy as much as we can while interest rates low but rising. Even better, put them in a mutual fund so that way you can lose all the interest you’ve gained in market side losses and still have to pay all those taxes on the phantom income. Sign me up!

I think I have attended as many corporate and wholesaler trips for production as anyone. I’ve been everywhere at your expense. Thank you. You didn’t know you were sending me, but all those fees and commissions you paid did the trick. My wife and I had a wonderful time. Only the best for us…especially when you are paying, thanks again.

In my defense, I always tried to sell products that had a high degree of safety and the fees and commissions were paid by the firms we represented or their suppliers. My specialty for all these years has been government guaranteed securities and or insurance products like life insurance and annuities. These are not glamorous or sexy, but I still have clients from twenty years ago. How many aggressive brokers can retain their clients for even a few years? For them it’s virtually impossible. Big losses occur along the way and people lose faith.

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