Do you believe that someone on Wall Street or anywhere else can predict the future? Do you believe that Wall Street has your best interest in mind? Do you believe Wall Street cares whether you make money?
My answers to the above questions is ‘NO’.
Each week I listen to prospective clients talk about the successes they have had with their investments. Usually their successes are confined to a short period of time.
When I ask what their long term success has been compared to a benchmark. I receive a very long pause. Followed by an ‘I don’t know’ or they scurry away and many times they get very defensive. This I believe is a sure sign that their successes are rare.
Peter Lynch was a very successful money manager during the eighties. He is a very rare manager whose success spanned more than 10 years. Unfortunately for investors this was not evident until after it was over. Mr. Lynch himself said ‘most investors lost money in my fund because they bought when things were going well and sold at dips’.
There is no way to tell which money manager will be successful over the long term. With thousands of money managers on Wall Street a small hand full will succeed. Unfortunately there is no way to determine which ones will succeed in beating the market.
The following excerpt helps define why investors need an investor coach/fiduciary adviser rather than a broker/agent.
“Every year I talk to the executives of a thousand companies, and I can’t avoid hearing from the various gold bugs, interest rate disciples, Federal Reserve watchers, and fiscal mystics quoted in the newspapers. Thousands of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can’t predict markets with any useful consistency. Nobody sent up any warning flares before the 1973-74 stock market debacle, either. Back in graduate school I learned the market goes up 9 percent a year, and since then it’s never gone up 9 percent in a year, and I’ve yet to find a reliable source to inform me how much it will go up, or simply whether it will go up or down. All the major advances and declines have been surprises to me.”
– Peter Lynch
To succeed in investing we need to own equities…globally diversify and rebalance. With the help of an investor coach/fiduciary adviser you will build a prudent portfolio designed for you. But most importantly your investor coach/fiduciary adviser will provide the discipline to maintain your portfolio during the inevitable advances and declines.
Don’t empower the Wall Street bullies by believing their predictions. It is a fruitless exercise.