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"The need for financial advice may be more psychological than practical"
An interesting article, one that points out what I have thought for a very long time: don't put much store in what the talking heads on television say. In some respects, their background may not be any more pedigreed than you or I. But there they sit, pontificating and prognosticating as if their crystal balls were plugged in to some all-knowing uber swami. And there are plenty of "advisors" who offer similar approaches.
Paying for advice should entail much more than picking stocks or sectors that are supposed to out-perform over the next 60 days, or "you gotta sell everything" advice that a fellow on Bloomberg suggested during the flash-crash of a couple years ago (that was very embarassing). Paying an advisor should lead to long-term habits, patterns of behavior, completion of specific aspects of life planning, or even just saying "I am not interested in all of this, there are other things I want to do with my time, and I am willing to pay to get all of this done or help me to get it done." Perhaps the best thing a finacial planning company might do is keep someone from following the herd in buying and selling, or understanding their company's 401k options (maybe an in-service rollover or a self-directed option hidden in the fine print), or making sure that outdated estate documents are revised, or offering advice on the difficult time when some folks are 1) trying to save for retirement, 2) getting kids through college, and 3) dealing with the declining health of their own parents.
As we often tell prospective clients, "what we do is not rocket science, but it's what we do, day after day. We don't get paid to entertain people like the folks at CNNfn, Bloomberg, Fox, etc. Unfortunately, many people think financial advisors are stock pickers and fortune tellers. There may be some who get paid big bucks to do that, but the real advisors have a pretty systematic process that has a lot more going for it than just transactions.
Hi Bob- never even thought of guys like you in the trenches with respect to that article. Personally speaking, your brand of financial advice has been both practical and psychological- now have small positions in two on that list: MAPIX and GASFX. Continuing to observe performance direction of the remaining funds, compared to existing holdings. So far so good. Thanks again for the time and effort you have put into helping others on FA and MFO.
Comments
Paying for advice should entail much more than picking stocks or sectors that are supposed to out-perform over the next 60 days, or "you gotta sell everything" advice that a fellow on Bloomberg suggested during the flash-crash of a couple years ago (that was very embarassing). Paying an advisor should lead to long-term habits, patterns of behavior, completion of specific aspects of life planning, or even just saying "I am not interested in all of this, there are other things I want to do with my time, and I am willing to pay to get all of this done or help me to get it done." Perhaps the best thing a finacial planning company might do is keep someone from following the herd in buying and selling, or understanding their company's 401k options (maybe an in-service rollover or a self-directed option hidden in the fine print), or making sure that outdated estate documents are revised, or offering advice on the difficult time when some folks are 1) trying to save for retirement, 2) getting kids through college, and 3) dealing with the declining health of their own parents.
As we often tell prospective clients, "what we do is not rocket science, but it's what we do, day after day. We don't get paid to entertain people like the folks at CNNfn, Bloomberg, Fox, etc. Unfortunately, many people think financial advisors are stock pickers and fortune tellers. There may be some who get paid big bucks to do that, but the real advisors have a pretty systematic process that has a lot more going for it than just transactions.
Best Regards- OJ