Be Careful Friends, All Financial Writers Have An Agenda

We want your attention and then we want to sell you on something. In my case, I want you to think about a few things that we believe you should be considering carefully:

1) Who you are investing with / through and why?
2) What you are paying for and how much it costs (fees matter)?
3) What level of responsibility your advice giver is taking? (i.e. are you getting legal fiduciary care? see my most recent blog)

My agenda is to help you think about making good choices and perhaps, if you are the right fit, joining our 100 or so client families in working with us at High Rock.

Others want to hook you into their newsletters or blogs so that you sign up and pay them for their opinions. Generally, they may be pretty well-established financial writers with some pretty good credentials. Problem is, for every opinion you get that points in one direction, you are probably going to get as many others that likely point in another. You are left to pull the trigger, which is never an easy role. Timing can be extremely important with these folks.

And of course there are the myriads of "free" tweeters and bloggers who flaunt the regulators by suggesting things like:

 "even during the 2008-10 financial crisis a balanced portfolio returned an average of 5% a year while stock markets cratered 55% and took seven years to recover".

This writer might have forgotten that the financial crisis happened in 2008, the stock market bottomed in 2009 and was recovering soundly in 2010. Nonetheless, sometimes they can be misleading.

But more importantly, when suggesting that things like: "stick with 60/40 it works" they don't include the required (by the regulators) disclaimer: "past performance is not a guarantee of future returns".

Or this bit of newsletter advice (in contrast) that I was recently sent by a good client: "You need your portfolio to both participate and protect. Don't blindly buy index funds and assume they will recover as they did in the past. This next avalanche is going to change the nature of recoveries as other market forces and new technologies change what makes an investment succeed. I cannot stress that enough. Do not get caught in a buy and hold, traditional 60/40 portfolio. Don't walk away from it. Run  away."

Some are cheerleaders for the stock market when it is making new highs because they want to inspire you to be buying while they are at the same time quietly taking sales and profits. On the flip-side, there are those who want to scare the pants off of you so that you will sell into their stealthy bid.

As a practical skeptic of all financial writing (when it is news it is likely too late to be getting involved), we take it all with a proverbial grain of salt.

We do our own research and we make our own, independent decisions, based on all the  material that we deem important. Especially the stuff that is not front page news.

We might write about it from time to time (or discuss it in our weekly video) as it is some (likely not all) of our thinking behind our decision making processes.

Importantly, before you buy into anybody's writing, give some thought to what they are trying to sell you and ask yourself why?

Good advice is never free!