Friday, January 30, 2009

How to Build Wealth Part III

(21) If you don't want to be cashed out during times of market volatility and pay fees on cash because your consultant doesn't know how to make you money during poor markets, then manage your own money.

(22) Perform a Google Search as follows: "SEC fines, Citigroup, Merrill Lynch, UBS Paine Webber, Morgan Stanley, J.P. Morgan" and read all the articles that are returned. The SEC stands for the Securities Exchange Commission, and they impose fines on investment houses when they engage in illegal or unethical behavior. Do you still believe that these firms have your best interest at heart after performing this search?

(23) Henry Blodget, once Merrill Lynch's top internet securities analyst, and other Merrill analysts once wrote in private emails that the internet stocks Merrill Lynch analysts were touting were "crap" and "junk" and that the only thing special about them were the investment banking fees these companies were paying to Merrill. (Source: The Washington Post, April 24, 2002). Though many firms have claimed to have separated investment banking from their brokerage houses today, do you really believe that a huge investment banking client that has paid massive fees to an investment firm will not pressure top management to tone down negative ratings regarding their company or to amplify otherwise already positive reports? Remember, Warren Buffet says he reads analysts' reports only when he needs a good laugh. How do most stock pickers at firms choose stocks for you? By reading their firm's analysts reports.

(24) It doesn't really make a difference in 99 cases out of 100 if an absolutely green financial consultant straight out of college manages your money or a 20 year veteran with silver hair manages your money. You'll receive roughly the same results because internal systems that guide consultants to choose money managers or firm developed asset allocation models don't change whether a consultant is 25 years-old or 65 years-old. If this doesn't scream sales optimization strategies over portfolio return optimization strategies, then I don't know what does.Individuals that say they have tried managing their own money but have failed have never implemented a realistic or proper system to do so.

(25) There is a global investment crisis aka the Peak Investment Crisis that is brewing and inevitable though the vast majority of investors are unaware of it ( and this is NOT a reference to any global market correction that may have happened recently). If you learn how to invest your own money now, which means learning a comprehensive investment system, you are highly unlikely to be caught unprepared when this crisis hits and destroys trillions of dollars in the financial market. Learn a proper investment system that teaches you to understand the global economy to guide your investment decisions and you will profit tremendously from this crisis.

(26) Most people that try to do it themselves and fail have no system. They buy financial instruments that are plastered all over the financial media, which more times than not, means that the stock has already had a fantastic run. After all, financial instruments that are languishing will not attract so much media attention. So they do the worst thing possible. They buy high and when it corrects, they sell out low.

(27) Individuals often say they can't manage their own money because they have lost money when trying to do so. However, the majority of individuals that say this never learned a proper investment system before commencing the management of their own money. So if you are among this subset of investors, below are many more reasons why anyone absolutely can learn to manage their own money.

(28) In the past, learning how to invest was all about number crunching, Dry and boring. Today long tail investment strategies have introduced a lot of creativity into investment strategies and actually made learning how to invest fun.

(29)Your neighbor told you he had a hot tip for a can't miss stock. You bought and you lost big. You vow to leave investing to the experts. Sorry, but this is hardly qualifies for an attempt to manage your own money. Foolishness, yes. Serious go at managing your own money? Hardly.

Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile.

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