Friday, March 13, 2009

Financial Advisors

Are not the most useful people around. For one thing many of them attend all the same seminars, read the same books, and get literature from the same investment houses.

I picked up a Kiplinger's (personal finance) magazine recently. It had some silly article on how to cope financially with the downturn. Too Late!!! The time for that article to go to press was in 2006!

Unfortunately most people who save for retirement have listened to the same "advice" regarding 'investing for the long-term', 'don't sell now, you will lock in your losses', and 'if you are young, you can recover from this'.

Perhaps. The inflation-adjusted return on the Dow right now has us back to 1966. So that means if you invested $1000 in the 30 Dow Blue Chip Stocks in 1966, today you would have $1000. And not a penny more. Looks like you need a VERY long term investing outlook.

Perhaps you have to be a little more active with your investments - engage in market timing. Which, by the way, the same "advisors" tell you is bad, very bad. You will lose money, they tell you.

Well, let's take a hard look at reality: How has being a passive investor worked out for you?

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