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A June 8, 2011 article in the trade journal Investment News, “Fee vs. commission: No doubt which investors prefer” cited a survey conducted by Cerrulli Associates asking investors about how they pay for investment advice and about their adviser’s standard of care. The article focuses on the finding that 47% of the 7,800 households surveyed prefer paying commissions.
A number of industry insiders were quoted using this datum as validation of their business model. The best was from Ira Hammerman, general counsel for the Securities Industry and Financial Markets Association, the lobbying group for the brokerage industry, “If you’re only going
Read More “Fee vs. Commission — No Doubt Investors are Confused”
Understanding brokerage statements reveals the true cost of the service being provided.
Judging from the questions I receive from prospective clients, it is clear that many investors do not understand their brokerage statements and confirmations. During the bull market of the late 1990’s may people didn’t care what their trading costs were. But in a flat or declining market both visible and hidden costs can make a difference; so it is important to pay attention. Here are some things to consider when reviewing brokerage confirmations and statements for clients. Further, if they have been told they are not paying any
Read More “Pay Attention to Brokerage Statements”
I recently had the opportunity to review the retirement portfolio for a tax professional I respect greatly. He, like most practitioners, is highly competent and renders excellent advice and service. I have introduced him to clients on a number of occasions and have always been glad I did. And, while I was pleased to be asked, I expected my review of his portfolio to be entirely pro-forma. Surely a practitioner of his stature would have a retirement portfolio with few, if any, issues.
I suppose I should have known better. Expertise in one area does not always translate into competence
Read More “Investment Results are Negatively Affected When You Don’t Know What You Don’t Know: a Case Study”
Inflation assumptions are a critical part of the retirement planning process.
When you consider the thousands of people who fell prey to Bernard Madoff’s $65 billion fraud you have to wonder whether your assets could fall prey to a similar disaster.
While the losses from Madoff’s Ponzi scheme are tragic for his victims the real tragedy is that had those investors followed some basic rules of prudent investing, they never would have invested with Madoff in the first place. Madoff’s scheme succeeded because of its lack of transparency, its foundation of trust based on social connections, and the belief that
Read More “Could Madoff Happen to You?”
We have been conditioned to believe that successful investors and savvy portfolio managers are the ones who “beat the market” by identifying the best stocks to own and the best times to own them. Movies like “Wall Street”, the 24-hour onslaught of CNBC, Money Magazine and the legend of the likes of Warren Buffet have all added to this conventional wisdom.
As a financial and investment advisor nearly every time I meet someone new and they learn what I do I am asked, “So, what do you think about the Market?” Implied in that question is the belief that, because
Read More “Behavior – the Key to Successful Investing”
Joni Mitchell wrote, “We are stardust, we are golden,” but she wasn’t offering investment advice about the shiny yellow metal that has captivated mankind since the dawn of time. Gold is the stuff of dreams and legend and clearly has value, but is it all it’s touted to be as an investment?
The argument is made that gold is an inflation hedge. In a world where governments are countering massive deficits by pumping more and more money into the system – simply printing money basically – then the less valuable those currencies become. Gold, so the argument goes, becomes more
Read More “All That Glitters Isn’t Gold. Nor Is Gold For That Matter.”
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