I don’t know about you, but I feel like this…


But we’re making our climb out!  Since I’m reading this financial book here are a couple things I’ve learned to look out for when investing.

The experts, (and by this I mean the .001%) say NOT to try to beat the market when you invest.  So what’s that mean?  Don’t put your money in mutual funds that are trying to beat the market.  It’s a losing game.

An incredible 96% of actively managed mutual funds fail to beat the market over any sustained period of time!”

If anyone suggests you invest in a mutual fund, be very skeptical.

Watch out for fees on your investments.  They’re everywhere.

“To escape the fee factories, you must lower your total annual fees and associated investment costs to 1.25% or less, on average. This means the cost of the advice (a registered investment advisor to help you allocate appropriately, rebalance your portfolio periodically, and so on) plus the cost of the investments should ideally be 1.25% or less.”

Don’t rely on yourself to pick the right stocks… When to buy or sell.  We’re emotional people.  We tend to want to buy when somethings doing well… and want to sell when it’s doing poorly.


Most people giving you investment advise don’t have any skin in the same themselves.00024

“In a sobering 2009 study released by Morningstar, in tracking over 4,300 actively managed mutual funds, it was found that 49% of the managers owned no shares in the fund they manage. That’s right. The chef doesn’t eat his own cooking.”

It’s a good question to outright ask someone giving investment advice if they’re investing their own cooking too.

“And here is the truth: the financial services industry has many caring people of the highest integrity who truly want to do what’s in the best interest of their clients. Unfortunately, many are operating in a “closed-circuit” environment in which the tools at their disposal are preengineered to be in the best interests of the “house.” The system is designed to reward them for selling, not for providing conflict-free advice. And the product or fund they sell you doesn’t necessarily have to be the best available, or even in your best interest. By legal definition, all they have to do is provide you with a product that is “suitable.””

“To receive conflict-free advice, we must align ourselves with a fiduciary. A fiduciary is a legal standard adopted by a relatively small but growing segment of independent financial professionals who have abandoned their big-box firms, relinquished their broker status, and made the decision to become a registered investment advisor. These professionals get paid for financial advice and, by law, must remove any potential conflicts of interest (or, at a minimum, disclose them) and put the client’s needs above their own.”

Just some thoughts. 😉