Investment Advice
Advice is cheap. Especially investment advice. Everyone (including me) is willing to share their opinion of the ‘next big thing’ but it’s usually all talk about huge potential returns, without disclosing any of the risk. I assume this is why people get involved in companies like 12dailypro.com, which had a great run luring thousands of people in with promises of 44% returns in 12 days. (The company is now insolvent and under investigation by the SEC and the FBI. [Update: The site is also blocked now too. It went from a full-blown business site, to a consumer forum to discuss the good points of 12dailypro, to being totally blocked after the SEC’s probe found that 95% of the payments were being made with new-member fees, and not by their “genius business model” of automated web surfing, meaning it was almost a pure Ponzi scheme.)
Some of the best commonsense advice I’ve seen for investing comes from Jonathan Clements of the Wall Street Journal. Some highlights:
1) You don’t have any friends on Wall Street. You may want to make money. But so does the Street. And the more the Street makes, the less investors pocket.
3) Most stock mutual funds are laggards and it’s hard to find the winners. Sure, there are funds with great 10-year records. But you can’t buy their past performance. Instead, what you get is the future — and often that isn’t nearly so dazzling.
10) If an investment is exciting, it probably won’t be especially profitable. Investors love to buy hot growth companies, trade mutual funds and take a flier on initial public stock offerings. Before you join the fun, however, consider how much you might lose — and how many paychecks it will take to recoup the money lost.
18) Insurance is a necessary evil. When you buy insurance, you are paying somebody else to take on risk that you can’t afford to bear. That can be a smart move. It will also cost you, however, so you shouldn’t buy more insurance than you really need.
19) You can’t get rich by spending money. The folks with the big house, fancy cars and designer clothes are, no doubt, loaded. But they may be loaded with debt.
Read the rest of this story HERE
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