How to find an Investment Advisor Written by Ulli G. Niemann
Do you think you need an Investment Advisor? Hold on before you answer because this is sort of a trick question. Also, I am definitely biased because I am an Investment Advisor. Nonetheless, I think I can assist you in looking at this issue in a way that will serve you. Working with a fair number of investors over last nearly 20 years, I have observed that while most are intelligent people, and many are fairly knowledgeable about market, they are, as a group, not terribly successful with their investing. Why should they be? More likely than not they have made their living doing something other than investing, so why would they think they can do what a professional does better than a professional? (After all, they go to professionals for health care or for car repairs when needed!) Most investors-even some professionals-tend to be "off" in their timing: they buy things when they are hot, not when they are cold. But for greatest benefit, it should be opposite. The media doesn't help much when it comes to this buying approach, and let's face it; greed and fear play a large part in most peoples' investment decisions. I truly believe majority of people would be better of (that is, they would end up with more money at end of day) if they used professional money managers to advise them on their investing. Specifically I am referring to Registered Investment Advisors with proven track records of performance in investing in stocks, bonds, mutual funds Let me burst one myth right off bat: You don't have to be a millionaire to engage services of a topnotch advisor. Some people think you need to start an account with $50,000 or more to get a really good advisor. Well, you may have more choices if you're at that level, however you can find very successful Investment Advisors who will accept opening accounts for as little as $5000. There are literally thousands of Registered Investment Advisors in US. Just what do they do-what service do they provide you? They do legwork; research and analysis. Maybe more importantly, they keep their primary focus on markets, and specifically on their specialty area like individual stocks, mutual funds, or bonds. Because they spend bulk of their time and energy researching, considering, and analyzing, they naturally have a greater sense of market and its movements than those of us who don't put this kind of attention into it. So, with right advisor, you can keep your focus on what you want-like your business or your retirement or whatever-and still get information you want and need to invest wisely.
| | The Inside Scoop on Mutual Fund Rip Offs Written by Ulli G. Niemann
The bear market that showed up at end of 2000 has every brokerage house-as well as entire mutual fund industry-scrambling to find creative ways to boost both their image and bottom line. Unfortunately, this is often at investors' expense. Fund managers are ever on lookout for ways to spin stats to hide lousy track records and to find ways to obscure fees. To add insult to (financial) injury, investors end up being penalized for selling. So what's an investor to do? In this case, knowledge is power. Here are some of ways mutual fund investors are being taken advantage of: ·Performance is always an issue for any investor. Formerly great funds, which I've used myself during 90s, are junkyard dogs of this century. Janus Fund comes to mind and is one of many that buy-and-hold investors got stuck with. It's down 59%, since we acted on our Sell signal on 10/13/2000. ·Most of funds today have 12b-1 fees place, and some go as high as 1% of a fund's assets per year. Between fees, commissions and management charges, mutual fund industry is always getting paid, even if you, investor, are losing money. For example, if you had bought SunAmerica 2-1/2 years ago, you would have paid above fees at 2.35% per year. And, if you finally decided your investment wasn't going anywhere, you would have been stuck with a 5% deferred sales charge. ·If you hold a fund less than 180 days, plan on being hit with a redemption fee. It's almost standard. What's deal? Brokers only get paid while you hold their fund. So, if you're going to sell, they get a last whack. It's a great deterrent for selling, too. Can this be avoided? Not completely, but if you have your money managed by an investment advisor, holding period is reduced to 90 days. ·Then there's deceptive no-load rip-off involving B-shares. Sure investors don't pay anything up front for these, but you'll pay hefty surrender fees when you sell. Plus, they carry higher management fees. Keep in mind that mutual fund companies have market share in mind, not your best interest. If you think that might not be true, consider skyrocket growth rate for pure technology funds. But look at them now: they've crashed & burned and no buy & holder has come out with a win.
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