Sunday, May 4, 2008

Fundamentals of Investing – Part IV


Leave it to the Experts!
Now that’s a phrase that’s becoming more common by the day. Just like peddlers of yore, that go from town to town selling snake oil, you have all manner of experts telling you how to invest your money.

There are so-called Certified Financial Planners, Chartered Wealth Managers, Chartered Financial Consultants, Chartered Financial Analyst, Insurance Agents, Unit Trust Agents and etc. etc. Let's call them "Investment Agents", for the moment.

Whose interests do they serve?
STOP! Think for a minute! If these Investment Agents are so good at investing other people's money, why don’t they invest their own money in the products they are selling to you? If they are as good as Warren Buffett, do you think they'll even waste their time talking to you? In other words, why don’t they put their money where their mouth is?

These Investment Agents don’t care whether your investments make money or not. For them, once they sell you the product, they immediately make a handsome commission based on the amount you have invested with them. Sure, they will tell you that this instrument is EXPECTED to make, say 40% return per annum. Ask them: Is it guaranteed? You may get a blank stare or a non-committal answer.

God helps those who help themselves!
In today’s time, PROFESSIONALISM isn’t what it used to be. In the past, professionals such as Doctors, Accountants and Lawyers used to take pride in their work and ethics. In this age, there is a tendency for professionals to take liberties with their clients’ and use their superior knowledge to take advantage (or even swindle!) their client’s monies.

And most of the so-called Investment Agents are definitely not people with extensive investment experience and knowlege. Their certifications only mean they have spent some time learning on the subject. However, are they good enough for you to trust your money to them? Remember, they are only interested in selling you their product to get their commission! Do you think they are interested in you and your well being? If you lose all your capital in the investments they sold to you a few months ago, do you think they will reimburse you? Pluuueeezzzzeee! I am sure they couldn't care less!

Some of you might not have time to manage your own money. If you don’t have time to take care of your own money, then make sure you can get someone with UTMOST integrity that can assist you in investing. However, when it comes to money, it’s hard to trust anybody these days. So my advice is, MAKE TIME to learn about how to make good investments.

Before you start investing, you need to do your own research and brush up your knowledge on what factors to consider when investing in various types of investment vehicles. Don’t leave your investment strategies to the experts. Experts want to use YOUR money to earn money for themselves. Never expect EXPERTS to take care of your money for you! That’s something you’ll have to do on your own.


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