Who has had this investing experence with all financial advisors?
Question:
What we learned was that the financial advisors advice today was no different than 8 years ago. Except for the balance between stocks and bonds which was a bit less on stocks.
The only comfort they offered about the risk of their portfolio and they all used it, was the rolling time period story. Now, we both have good memories so my husband and I picked up on this quickly. 8 years ago in our advisor interviews the rolling period was 10 years. Now in current interviews some discussed 15 years and some 20 years. Why should we believe this now when the 10 year rolling period did not work for us? Another example was the amount of income we could draw from our portfolio. 8 years ago they said a 5% to 6% draw and we would not run out of money. Now, with straight faces, they say 3% to 4% draw and we would not run out of money. Well which
Answer:
Everyone who has talked to Financial Advisors since the late 1980's, early 1990's and still do today have had this experience.
This is how they are trained. This is the concept that they use to get you to follow their program and put your money at risk.
This the concept that they say proves you will not lose money in the stock market.
First they used 10 Year rolling periods.
Now some use 15 Year and some use 20 Year.
Remember the "get out of jail free card"
" Past performance is not a guarantee of future results"
I have not had the exact same experience, but after many endless weekends researching the advisor recommended funds, including heavy fees, versus my own research via Morningstar, I dumped the advisor and ended up going at it on my own.
The best advice I can give you is to do the same. Do a little research on your own using Morningstar. Vanguard, no-load, index funds are the way to go. Ever wonder why an advisor will never recommend these funds? There is fee for them to collect on.
It is really not a "which" or at least not a good one. These people you refer to, CFP's were educated and told economic theories by the companies they first worked for, often insurance companies or brokerage houses.
They are pretty close to putting themselves out of business, with no help from anyone like me. They are still quoting hopeless old theories like the ones you mention in a new and different market,
totally in a world where the prize pick of last year may be going out of business this year. I heard some pretty wild stories today as Ford layed off 10,000 workers, closed some plants, etc. not that they were a prize pick either year.
It is a TRADER'S market now, not an INVESTOR'S market.
Hardly anyone is in a stock for a year ! Hardly anyone trades with Merrill Lynch, $80 a trade, stay in and believe in the stock until it drops so low it just flat goes off the board !
If you want a good 5year investment, try CAT if you can catch it low 60's. I have had 9 or 10 splits with HD, made some recent money with MOT coming back, but pick your own, most important, learn when to SELL ! Do not marry !
Its pretty simple really. Most of these brokers work for firms that have investment banking activities. In other words, out the front door they're trying to get you to buy stocks when out the back door their real clients are trying to sell stocks. So 'advice' you get is going to be tainted with institutional bias. I would recommend getting an independent Certified Financial Planner who has no affiliations with any investment banks or investment banking activities. Have them make recommendations, then go to another and have them do the same thing. Do the same thing you would do with a doctor: get a second and third opinion. People are too quick to invest their life's savings on the whim of a guy in a sharp suit. Be smart; you'll be happy you took the extra time.
Hope this helps!
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