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No. of Recommendations: 3
This is once again from Jason Zweig of the Wall Street Journal. Right now, when everyone seems to be getting rich, it is easy to take risks you will later regret. A good financial advisor helps you with your portfolio, but more than that, he helps you manage your emotions. I don’t think the purpose of an advisor is to make you rich quickly. I think it is to give you good risk adjusted returns.
The problem is that advisors also get carried away with their emotions.

During the great recession, many financial planners were selling equities as the market fell, when according to investment theory, they should have been buying.

4 studies have shown that financial advisors chase what is hot, and dump what is not hot.
Another study showed that 17% of advisors who don’t have their clients’ money in crypto currency plan on doing so.

How can you protect yourself from this?

A few things to watch out for.

Over promising. We can avoid down markets, we can get you a 5% yield on safe assets, the upside is huge.

Also, look for advice that you don’t normally hear. Structured products, SPACS, IPOs, crypto, etc.
You can ask them for examples, of when they talked a client out of taking risk.
You could also ask to see their portfolio.

I will leave you with a quote. “I can’t tell you how to get rich quickly, but I can tell you how to get poor quickly.
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