OK, having enjoyed my rant on what to stop doing, now I will share my thoughts on what you should do!
Let me preface this by saying my beliefs carry into the work I choose to do but do not require an investor to engage my services or, anybody's, to take charge of your investments. Consider it a free consult!
Point: ONLY YOU CARE ABOUT YOU!
You both "earn" your money and "own" your money. It seems that many people spend more time cleaning their golf clubs than they do managing their money. Sorry, I do not believe the common drivel that “I am so busy I have no time”. You spend 8-10 hours each working day to earn money and then you hand it to an advisor you met an hour ago because they are your friend’s cousin’s brother and thus can be trusted.
Point: GET AN EDUCATION!
The investment industry fills the airwaves and newspapers with financial pornography designed to excite you and thus lower your defenses as they pick your wallet. The blogosphere cannot be trusted, after all who is behind the blog and how do they make money? Ya, that includes me if you have not done your homework.
Point: You need to explore your personal needs before you go hunting for a sales person to sell you securities.
Point: You need to direct your advisor on what you need to do.
- I will not pay total costs in excess of 2% ever
- I will not buy deferred sales charge funds EVER
- My target rate of returns net of fees is x%, what is the lowest risk portfolio you can structure to achieve that goal over the next 5-10 years
- I will not hold any individual security that represents more than 10% of my portfolio
- I do not want any product where I do not understand how it works or how everybody involved gets paid
You need to get the advisor to sign the above documented objectives for your records.
Point: We are back to the key point “ONLY YOU CARE ABOUT YOU”.
Point: The on-going management of your account is made either hard or easy based upon whether you think you have super powers or whether you think you are normal. If you have super powers and can tell really good B.S. from the truth and can explain why the smart folks with sure fire winning strategies are giving away the information for free, then you should actively manage your money and make lots of really smart trades every day!
Action: Nobody consistently beats the markets. Nobody consistently beats the market. Yes I did repeat that for a reason. It is very expensive to buy into the delusional view that some people know what random market move will happen tomorrow.
THE SECRET TO SUCCESS: SEPARATE WHO GIVES YOU ADVICE FROM WHO SELLS YOU SECURITIES.
To those who do care and think your money is important for what it can provide your family for years to come; put in the effort or hire somebody to do it for you.