Question For Any Financial Advisors

[BuffaloBill]

Hey guys,

Okay, here is my situation. I made some really good money (back when business was good) and then I got out. I owned a few businesses and then I sold them for a lot of money.

I took all of the money and gave it to a financial advisor to invest for me in the stock market.

This was about 3 years ago.

Since then, my account is down about 33%.

My advisor keeps telling me to ride this thing out and that since I am still young I have time for the market to recover.

My question is, should I believe him and wait for this thing to recover, or should i just bail now and cut my losses?

His theory makes sense, but only to a point.

What if the Dow drops to 3,000 and it takes 20 or 25 years just to get back to where it was? What is the point in that? Just so he can make money off of me?

I still have enough in the account to just bail out and still live very comfortably. The loss would hurt, but I can live with it. I will not be able to live with it, if it gets much worse from here.

I started out feeling like I was making a good investment, because this advisor was highly recommended to me, but now I just feel like I am gambling.

I would appreciate any advice from people who really know this field. I am a very smart business man, but I really don't know much about stocks.

I found this advisor who is supposed to know what he is doing and he also very expensive.

Any advice is greatly appreciated.

Thanks a lot guys.

 

[THE KOD]

I am not sure you should even come in a gambling forum to ask a questions like this.

I have lost over 55% of stock value and about 36% in 401 K accounts.

Probably not near what you have to worry about.

The answer is that no one knows wtf is going to happen. You can pay the best minds in the country and they will probably say its a toss up.

But its easier when its not your money.

Do we cash out now and eat the losses. Can we hold out for a year and when the market improves take advantage of a strong recovery.

Alot of people would probably like to be in your situation. So many are unemployed right now and worried about keeping their homes and paying bills.

I would be careful about answers you get from forums. And that would include me.

gl

 

[DOGS THAT BARK]

Hey guys,

Okay, here is my situation. I made some really good money (back when business was good) and then I got out. I owned a few businesses and then I sold them for a lot of money.

I took all of the money and gave it to a financial advisor to invest for me in the stock market.

This was about 3 years ago.

Since then, my account is down about 33%.

My advisor keeps telling me to ride this thing out and that since I am still young I have time for the market to recover.

My question is, should I believe him and wait for this thing to recover, or should i just bail now and cut my losses?

His theory makes sense, but only to a point.

What if the Dow drops to 3,000 and it takes 20 or 25 years just to get back to where it was? What is the point in that? Just so he can make money off of me?

I still have enough in the account to just bail out and still live very comfortably. The loss would hurt, but I can live with it. I will not be able to live with it, if it gets much worse from here.

I started out feeling like I was making a good investment, because this advisor was highly recommended to me, but now I just feel like I am gambling.

I would appreciate any advice from people who really know this field. I am a very smart business man, but I really don't know much about stocks.

I found this advisor who is supposed to know what he is doing and he also very expensive.

Any advice is greatly appreciated.

Thanks a lot guys.

Not a financial advisor-more so in risk manangement field--

--but answer to your question would be no brainer as far as I am concerned.

People take risk to get to where you are now--once there-Risk become your enemy.

What 2 things could occur if you stay fully invested.
A: You could make more--but you don't need it per highlighted area above.
B: You could lose substantially and be back to where you were before you made your fortune.

If you go into primarily fixed rate investements--your basically home free--almost

--as you still have concern of collapse of dollar. Would certainly put assets in different currencies to to spread that risk.

1st thing I would do is fire your advisor--he should be aware that you are financial set and his primary objective should be to conserve your assets--not take unnecessary risks.

I would speak to some people you know that are in similiar financial setting as yourself and see what their advisors recommend--I'd be looking for someone strong in conservation and tax planning. If your broker now doesn't have you in any high rated tax free municipal bonds--I'd fire him twice.

 

[dawgball]

I found this advisor who is supposed to know what he is doing and he also very expensive.

Does he have you in mutual funds? If so, fire him immediately if he is more expensive than others.

If you have a substantial amount of money, I highly recommend you looking into "fee only" advisors. They do not make any money on commissions of what they sell you.

You pay them an hourly rate or set amount for the "service" of advice tailored to your specific needs. Much like you would a good attorney.

The problem if your current financial advisor has you in mutual funds is you have more than likely been hit pretty hard with fees getting in.

Good luck, BB. And if you currently have enough money to comfortably live out your life, you should certainly have a substantial amount of your money in fixed assets as DTB suggested. You can still have a portion of your assets in investments that are high risk/high reward. You may be interested in Nassim Nicholas Taleb's theories on this. The theory fits very well for your situation (if you agree with him).

NOTE: Taleb has much more to say than just "The Black Swan"

 

[DOGS THAT BARK]

Does he have you in mutual funds? If so, fire him immediately if he is more expensive than others.

If you have a substantial amount of money, I highly recommend you looking into "fee only" advisors. They do not make any money on commissions of what they sell you.
You pay them an hourly rate or set amount for the "service" of advice tailored to your specific needs. Much like you would a good attorney.

The problem if your current financial advisor has you in mutual funds is you have more than likely been hit pretty hard with fees getting in.

Good luck, BB. And if you currently have enough money to comfortably live out your life, you should certainly have a substantial amount of your money in fixed assets as DTB suggested. You can still have a portion of your assets in investments that are high risk/high reward. You may be interested in Nassim Nicholas Taleb's theories on this. The theory fits very well for your situation (if you agree with him).

NOTE: Taleb has much more to say than just "The Black Swan"

Excellent advice there Dawg--kills a lot of birds with one stone!

 

[BuffaloBill]

Thanks a lot for the responses guys, I really appreciate it.

I have some more research to do before I make any decisions on this.

I am giving my accountant a call on Monday morning to see what he has to say about it.

Thanks again.

BB

 

[skodaa]

Look into.......

First Catholic Slovak Union
a fraternal benefit society
6611 rockside Road
suite 300
Independence, OH, 44131

currentlt returning 5% :00hour

 

[maverick2112]

Only a fool would have a dime in anything other than fixed assets with all the bullshit, lying, stealing fradulent activity that has been going on behind the scenes the past few years..........in you trust anything to do with the stock market now you a in denial. In fact the reason the DOW will continue to tank to at least 5000 is because a lot of people, companys and countrys are saying enough of this bullshit and are taking what capital they have left and hitting the road.

I have a friends parents who had 3 million in the market last Jan 08............checked on it Oct 08.......worth 1.7 million.........Stockbroker gave them the same line of bullshit........"You cant get out now, you will miss out on things when it goes back up"............they just went to their accountant yesterday and their portfolio was worth a whopping 675,000..............

And I thought gambling on football games was bad.............

 

[The Sponge]

......"You cant get out now, you will miss out on things when it goes back up"............they just went to their accountant yesterday and their portfolio was worth a whopping 675,000..............

And I thought gambling on football games was bad.............

yep Mav and u hear this same ole tired line from these advisors and especially on tv. when u hear this shit on TV run for the hills. Its so identical to sports wagering that it is laughable. if this guy was any good this fellow wouldn't have lost the 33 percent to begin with. Its easy to say "stay the course when it isn't ur money". My stuff has been in fixed rates for over a year now and it aint moving for what looks like a long time from now. These advisors remind me of the guy who refuses to sell a sinking ship of a stock thinking it will turn around some day. They fall in love with their stocks and refuse to sell. Been there done that and will never do it again.

 

[dawgball]

I have always believed that there was only a fine line btwn sports gambling and investing, but there is one major difference.

You can grow/lose capital in increments with each decision in financial "gambling."

In sports gambling, your staked amount is at risk of losing 100% of value each time.

You can use money management in sports gambling, but it takes MUCH more discipline to do it effectively.

 

[vinnie]

I still have enough in the account to just bail out and still live very comfortably.

then why do you need more :shrug:

 

[THE HITMAN]

Bill........I am not a financial advisor per se, but I know my way around most of it. And as one of the older members here, I have seen it all (and even some of it twice).
Anyway, the key problem to me would be in your second paragraph which said that you took ALL of the money and invested it in the stock market. You left yourself pretty open to on needed risk when, IMO, in your position, you should have been interested in preservation of capital first and then investment risk(s) after. The 33% you are down is really not that bad, comparatively speaking, that is. Many are down in the 50% range.

Hey, but what is done is done.

I would really diversify whatever you have left. At least 15-20% in some real estate( land or commercial bldg or a home or apts.) As everyone knows, there are many bargains to be had here right now. And, asuming you have nice credit, you can control alot of property on the cheap (you don'y need to pay for them (it)in cash here). Mortgages are ridiculously cheap now, 5% + if you want to upgrade yourowner occupied house. Or, a bit more for investment property. Man, this is a great rate to lock in for 15-30 years, just great. Even if it comes down a bit.....so what? It is still great.

10% in gold..........I would lean towards bullion.

20-25 % in cash (CD's, Treasuries etc)

15-20% in bonds or related

5-10 % in collectibles. Hey, you like old cars ? Nice deals from cash strapped sellers now. An nice old Corvette or T-Bird are always easily re-sellable. Or maybe some old slabbed high grade rare coins.

Then do with the rest however you choose..... now here comes your stock plays.
Instead of individual companies for it all, do some mutual funds. If your broker charges you too much or balks, dump him. Compile some information on your own and just buy the stuff yourself. E-Z to buy mutual funds, just a phone call. And just open an acount with a brokerage for your individual choices. But, I guess if you wanted to do it yourself you wouldn't have opened with a dealer in the first place, but this is good food for thought anyway.

Just my 2c, best of luck in whatever you choose.

 

[dawgball]

You could also buy some really cheap properties to rent out on an on-going basis.

Be sure to build a 10% management service fee in to your calculations, so you are not in the property management business.



Just some other ideas.

 

[gardenweasel]

Bill........I am not a financial advisor per se, but I know my way around most of it. And as one of the older members here, I have seen it all (and even some of it twice).
Anyway, the key problem to me would be in your second paragraph which said that you took ALL of the money and invested it in the stock market. You left yourself pretty open to on needed risk when, IMO, in your position, you should have been interested in preservation of capital first and then investment risk(s) after. The 33% you are down is really not that bad, comparatively speaking, that is. Many are down in the 50% range.

Hey, but what is done is done.

I would really diversify whatever you have left. At least 15-20% in some real estate( land or commercial bldg or a home or apts.) As everyone knows, there are many bargains to be had here right now. And, asuming you have nice credit, you can control alot of property on the cheap (you don'y need to pay for them (it)in cash here). Mortgages are ridiculously cheap now, 5% + if you want to upgrade yourowner occupied house. Or, a bit more for investment property. Man, this is a great rate to lock in for 15-30 years, just great. Even if it comes down a bit.....so what? It is still great.

10% in gold..........I would lean towards bullion.

20-25 % in cash (CD's, Treasuries etc)

15-20% in bonds or related

5-10 % in collectibles. Hey, you like old cars ? Nice deals from cash strapped sellers now. An nice old Corvette or T-Bird are always easily re-sellable. Or maybe some old slabbed high grade rare coins.

Then do with the rest however you choose..... now here comes your stock plays.
Instead of individual companies for it all, do some mutual funds. If your broker charges you too much or balks, dump him. Compile some information on your own and just buy the stuff yourself. E-Z to buy mutual funds, just a phone call. And just open an acount with a brokerage for your individual choices. But, I guess if you wanted to do it yourself you wouldn't have opened with a dealer in the first place, but this is good food for thought anyway.

Just my 2c, best of luck in whatever you choose.

never could wrap my head around letting some schmoe working on commission fool around with my life`s savings....

but that`s me...i`m conservative...

 

[gardenweasel]

Bill........
10% in gold..........I would lean towards bullion.

20-25 % in cash (CD's, Treasuries etc)

15-20% in bonds or related

Then do with the rest however you choose..... now here comes your stock plays.
Instead of individual companies for it all, do some mutual funds. If your broker charges you too much or balks, dump him. Compile some information on your own and just buy the stuff yourself. E-Z to buy mutual funds, just a phone call. And just open an acount with a brokerage for your individual choices. But, I guess if you wanted to do it yourself you wouldn't have opened with a dealer in the first place, but this is good food for thought anyway.

Just my 2c, best of luck in whatever you choose.

very smart hitter...never could wrap my head around letting some schmoe working on commission fool around with my life`s savings....

but that`s me...i`m conservative...

 

[THE KOD]

very smart hitter...never could wrap my head around letting some schmoe working on commission fool around with my life`s savings....

but that`s me...i`m conservative...

...................................................................

your not even smart enough not to double post

 

[THE KOD]

very smart hitter...never could wrap my head around letting some schmoe working on commission fool around with my life`s savings....

but that`s me...i`m conservative...

....................................................................

your not even smart enough not to double post

 

[hedgehog]

my advise would be to ride it out, this is the worst time to sell possible. I know the stock market will not come back until Obama is gone, so just stick it out and you will be fine. I was told 10 years ago, do not have any money in the stock market you need in the next ten years.

 

[gardenweasel]

....................................................................

your not even smart enough not to double post

....................................................................

your not even smart enough not to double post

irony abounds...:lol2

 

[THE KOD]

I did a funny like you do that no one gets.

at least my humor makes a semblence of sense.

PS your just stupid