We’ve all heard that high blood pressure?? is the silent killer because it tends to show no or few symptoms until one day you just drop dead of a heart attack. To investors, that silent killer is inertia – staying on your current path even though it’s not working.
Time and again I meet with potential clients who tell me they haven’t made money, or worse, they’ve lost money, for a number of years with their current advisor.
The Jaw Drop
I almost hesitate to ask the obvious question because I don’t want to make them feel bad, but I can rarely stop my jaw from dropping and my eyes from getting wider so I usually don’t have to voice the “Why?” before they launch into their litany of reasons:
- Our advisor kept making changes, telling us next year would be different so we felt he/she was on top of things and we kept hoping this time he/she would be right!
- We’ve been adding money every year so our account balance seemed to be increasing and there was no clear way for us to know what rates of return we were getting as it wasn’t reported to us or we received reports on how well certain of our investments were doing and it seemed good.
- We didn’t pay that much attention because we trusted our advisor and felt he/she would tell us if we weren’t on track to achieve our goals.
- We watch CNBC, BNN, blah-blah-blah, and the experts all say the same thing: “Stick it out during the down times, don’t panic, things have to go back up!”
- We were so busy with jobs, kids, life and that’s why we hired our advisor – to look after our money for us.
A Broken Model
Sadly, things don’t usually change just because we hope they will be and the experts are usually wrong and not everything that goes down necessarily comes back up and even those things that do might only do so after we’re all dead and gone or at least too old to recover from bad investment decisions. Further, I believe the traditional financial models most advisors are using to make their investment recommendations is now broken and will not recover.
I don’t believe stocks will continue to offer the highest long term rate of return and I know for a fact that you don’t have to wish and hope and pray that your investments will work out while you white-knuckle through the downside volatility.
There are alternative strategy investments now available to all investors, rather than just the wealthy, that provide a consistently positive, significant rate of return that can help you achieve all of your growth and income goals.
Unfortunately, most investment advisors are not going to recommend them to you because they either don’t know about them, they don’t have the time to investigate them, or their boss (the bank or dealer they work for) has strong-armed them into recommending their own products which are more profitable for the firm or standard run-of-the-mill-non-performing investment products that at least are well-known and therefore, acceptable.
It’s your money and your future and your life! Don’t let inertia or affection for your advisor because they are a friend, relative, friend of a relative stop you from taking action NOW!