What the Best Investors Do Differently to Manage, Invest, & Protect Their Money. October 22, 2016
A couple times a year I sponsor an educational seminar for investors. This morning I realized that everyone that reads these updates would benefit from the same information, so here is a recap of some of the core points I usually make when educating investors.
6 Key Investment Lesson from the Wealthiest Investors
1. The most successful investors don’t hire brokers or financial advisors to help them, nor do they go it alone — they work with fiduciary investment advisors. That difference has historically been worth about 3% a year according to Dalbar Associates, an independent research firm. That difference adds up quickly.
CLICK HERE to learn more about the differences between advisors, and how to tell if your advisor is actually on your side or not.
2. 87% of brokers and financial advisors do NOT have a fiduciary responsibility to their clients. Instead, they collect hidden commissions on YOUR money. If you think your advisor doesn’t, you are probably in for a surprise.
3. The majority of companies in the industry base their business models on hidden commissions paid by mutual funds or proprietary products (Edward Jones, Merrill Lynch, AXA Advisors, Ameriprise, Morgan Stanley/etc..) This takes money out of your pocket, where it belongs. (Sometimes a LOT of money!)
4. The wealthy invest like university endowments and big pensions–they don’t chase the market. Instead, they focus on managing risk. Many use reduced correlation or non-correlated investments to help protect their assets from difficult-to-predict markets.
5. Diversification is NOT enough. In 2008 there was no real difference between the largest, most diversified global funds in the world and the S&P 500 – all fell hard and took years to recover.
6. Wealthier investors understand what to expect out of their portfolios and have a plan – they know how much they have to save and by when to hit their goals, they take the least risk possible to get there, and they have a plan for dealing with the market when things go wrong.
I hope this reminder is timely and helps you as we head into an unpredictable presidential election.
If you don’t feel you have control over your portfolio or still don’t know how much you are losing to hidden fees, maybe it’s time to act.
Time goes by fast. Will it be another year before you do something to improve your investments?
CLICK HERE to get in touch. We’ll check your portfolio for hidden fees, and see if my firm and I can add value to your life and to your investments.
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To Smarter Investing,
Vice President & Market Strategist
ACI Wealth Advisors, LLC.
Process Portfolios, LLC.