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Investing/Strategies / Retirement Investing
|Subject: Re: After meeting with a Financial Advisor||Date: 10/4/2003 6:08 PM|
|Author: BuildMWell||Number: 37386 of 79741|
"A good Financial Advisor is like any other good investment, difficult to find but worth the effort. Superior Financial Advisors are just as rare as superior investments." - PosFCF
While I cannot argue with this conclusion, I find the premise severely flawed. How can one find that rare "good financial advisor" without losing many dollars in the search? Since good ones are rare, in your own words, isn't it expensive to sort through all of the bad ones?
In my investing career, which began almost 40 years ago, I have worked with at least 25 financial advisors at at least 12 different investment firms. These firms are represented by lots of great and notable big names such as Smith-Barney, Merrill-Lynch, Bear-Stearns, Edward-Jones, A.G. Edwards, Prudential, Raymond James, and Payne Webber. I worked with some local small firms too. I cannot begin to count the money I lost listening to these idiots. They seldom gave consistent advice that beat the averages. Overall, their loses were far more destructive than their winners were constructive to my portfolio. Unfortunately, I was so busy working at my job and making money to invest for my future that I had no time to figure this out. I just kept sending them money to fund every new idea that they came up with. Heck, they all sounded good to me! What did I know? They were supposed to be the damned experts. I was the raw capital earner!
One day, I sat down and did the math. Of all of the brokers, only one had consistently given good advice. That was Payne Webber, by the way. All of the rest never beat the market...not one year out of many. Some never made money for me...after many years, my account was about equal to the cash I had fed into it over time. I was being fooled by my own contributions. Others made money fairly consistently, but when compared to the S&P 500, they were pitifully tiny gains. Unfortunately, back in those days, the existence of index funds was well concealed. No broker ever suggested an index fund to me. The comparison to their own piss-poor performance would have been too easy to spot!
Luckily, I came to see the real problem. The real problem was me! I was too trusting and too naive. I realized that I could work for myself and make far more money than relying on financial analysts for my success. However, this took too much time away from my work so I retired at age 49 and went to work full time for myself. Today, I beat the market every year because it really is not that hard to do.
At first, I bought some index funds to use as my tell tale. Each year I compared my results to the fund's results. The first year I failed to beat the indices. However, I still had lots of the losers the experts had talked me into. I was slowly learning though. The second year I beat the index funds by a small percentage. Since then it has been no contest. Beating the idex funds is a no brainer once you find out what is going on.
I am not a day trader either. I rarely sell stocks and I buy maybe five stocks at most each year. However, investing has become my full time job. I really dislike mutual funds and indwx funds. Both rob the investor of his ownership in a company.
When you buy a fund, you give up your stock voting rights to the fund manager. Fund managers almost always vote with the company management. In my opinion, this is exactly what caused the problems we now see on Wall Street. The individual investor has given up control to the "experts" who have no real interest in the individual. If they do not like what a company is doing, they do not blow the whistle on the business, they just sell it. Someone else will buy it. There is always a sucker out there to buy anything. The funds will still vote with the management of their new purchases. That has proven to be a real mistake. Management is out for management...not for the stockholder. Stock Options prove that simple fact.
If more folks did what I do, Wall Street would be a far better place. I follow the businesses I own and I vote my shares as I see fit for my advantage. That is how it is supposed to work. The stockholders own the business...not the management. The management works for us. Stockholders provided the capital that made the business possible.