by Al Thomas
The Surgeon General
by Al Thomas
The Surgeon General of the United States says that smoking
cigarettes is harmful to your health. It is printed on every
pack of smokes you buy. When was the last time a smoker read
or paid any attention to it?
Don't you wish your brokerage account had some kind of warning
telling you when to sell out of a stock or mutual fund that is
going down? How about "If this stock falls more than 12%
below its highest closing price the Money General says it should
be sold and the money reinvested in a different equity"?
Think of what that would have done for your financial health
during the past 2 years. Most people would be feeling a lot better.
Your broker is supposed to be a doctor of finance and should
be concerned about your financial well being. When you ask him
why your portfolio has gone down you probably will get one of
two answers "Don't worry, the market always comes
back" except when it doesn't. And "Buy and hold
is the best strategy when you are in for the long haul".
That long haul may be 20 years to break "even". Of
course, that does not make you feel any better when you see your
money disappearing. It all comes down to the fact he does not
know how to do this and has not been trained by the brokerage
company. The same goes for most financial planners.
Financial planners will tell you how to split up your investment
among stocks, bonds, mutual funds, real estate and so forth,
but they have no idea when to sell out of a losing position.
Neither brokers, bankers nor financial planners have ever heard
that cash is a position. Yes, cash in a money market account
will not make big returns, but it will protect your money while
the stock market is in a general slide down. Think about this:
what if your money had been in a simple 3% money market account
for the past 2 years. Would you have more money today? Probably.
It is very difficult to find a broker who has any training in
protecting your assets. If you ask to see the training manuals
for brokers you will find two. One concentrates on learning all
the rules and regulations of the Securities and Exchange Commission
so they will not be sued and the other is a Sales Manual on how
to open new accounts and get investors to put in more money.
No instruction on how to protect the investors money when a stock
or fund starts down. The one thing they are never taught is when
If you expect to have financial health you must learn how to
wisely invest your money. There is no Money General or Easter
bunny. You cannot rely on any "expert". Just as you
are responsible for the health of your body by what you put into
it so your financial health is up to you by making sure you do
not lose what you are putting away for your retirement.
Copyright Albert W. Thomas All rights reserved. Author of "If
It Doesn't Go Up, Don't Buy It!" www.mutualfundmagic.com
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