Monday, May 3, 2010

Big Fat Legal Disclaimer!!!

The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author.


What you need to know:

Your current financial advisor (and/or their employer) collects commissions and trailer fees for the mutual funds they "manage" in your account.

If they didn't do their homework, can you sue your financial advisor for professional negligence in a court of law? (especially if they didn't fully explain to you the risks of investing in a secular bear market.)

The question is, are they paid to sell you investment products, or are they paid to provide you with "unbiased", "professional" advice?

It is not you who pays them, so they are not working for you. At least, that may well be their legal defence should investors ever decide to take them to court for the poor investment advice they have received.

If that is the case, is it not their responsibility to inform you up front that they are actually working as salespeople on behalf of the mutual fund companies?

P.S. I think you should run as fast as you can from anyone who continues to pass off the following as professional financial advice:
"Don't worry, the government won't ever let the "free-market" collapse."

P.P.S. In the last ten years, the government has twice brought interest rates down to virtually zero in order to force savers back into equity investments (and real estate) to re-inflate asset values.

The last economic boom was supported solely by a housing bubble, but that bubble has now popped.

After the crash of 2008, have those that could borrow at virtually zero interest rates already done so and used the borrowed money to buy equities (and thereby brought the stock markets roaring back in just a year's time)?

Are those buyers now just looking for an opportunity to sell, just as middle-class investors once again gain enough confidence to start jumping back into the markets (at exactly the wrong time)?

Remember, most investment advisors are paid to sell you product. They are salespeople first and foremost. They are not fiduciaries. Might they care about what is in their best financial interest more than what is in your best interest?

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” - Upton Sinclair

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