Fred Mcallen Investing Advice

Good investing advice is difficult to find. Investing decisions are no longer advised by a stock broker with years of experience under his belt and a proven track record. In today’s world the investment firms compete for assets under management and actively recruit sales personnel from internet job posting sites, and many advertise job openings on those same sites. The twenty-first century financial advisor is a sales person. Many have no capital market experience, have never bought or sold a single security, and are trained only in sales techniques.

In November 2007 I was invited to speak at a major investment firm’s training center. There were 34 recruits from all over the United States that particular week in attendance. The investment firm had hired them, paid for an online course to pass their exam, paid for their accomodations for the entire week, and was training them on how to sell investments.

Prior to arriving, each recruit had compiled a list of potential clients to call and make sales while the instructors listened to the conversation and provided pointers on ways to improve the selling techniques. The recruits were provided three possible investments to sell depending on the potential client’s possible investment need.

1.A mutual fund
2.Shares of Pepsi stock
3.A bond in the firm’s inventory

To appreciate significance, you must understand that prior to attending training; each recruit had been given 6 weeks to build a list of potential clients with a mandatory minimum of 25 per day, or 100 per week. Therefore, every recruit had a minimum of 600 individuals to contact with hopes of selling an investment. Thus, collectively, there were at least 20,400 potential sales.

Did you take note of the date mentioned above? Yes, November 2007, the market was near an all-time-high and topping out. Virtually every sale the recruits made resulted in an eventual loss to the investor. I hope you were not one of the victims.

You are probably thinking what I just described is an occasional thing. If so, you are wrong. Investment firms turn out a new class of recruits every single week. The firms advertise job openings on internet job posting sites like Monster and Hot Jobs. They actively recruit unemployed individuals who have posted their resume from those same sites.

These recruits have absolutely no capital market experience and most have never bought or sold a single security.

As an Investor, you already have more experience than they do. Taking a short online course to pass an exam IN NO WAY means these financial advisors are experienced or are professionals. They are sales people, nothing more, nothing less.

In today's world, the active role in making investment decisions has subsequently become the sole responsibility of the investor. Any investing advice should always be taken with a large grain of salt, realizing that any such advice is coming from an advisor that has a vested interest in making a sale and earning a commission. Sales personnel are trained to sell, and many unsuspecting investors discovered the hard way how financially devastating it can be to invest at the wrong time by purchasing investments during market tops such as 2000 or 2007. Those investors paid dearly for their education by buying mutual funds and stocks only to watch the market decline and take an average of 30% of their portfolio value with it.
Unfortunately, some may never get back to break-even.

The individual investor must realize that it is his or her responsibility to protect their investment capital. Sales personnel are trained to sell, that's it, nothing more. They do not have a plan for you to move your money to safety during bad economic times, market corrections, or bear markets.

Investing advice is free, but you get what you pay for. If you ask five different advisors, there will be six opinions. The five advisor opinions - and one correct opinion.

Either educate yourself to invest wisely or keep your money safe in the bank. It really is that simple.

Relying on a salesman to make your investment decisions is nothing but a crap shoot, a gamble. Never risk your money without knowing what the risks are, having a plan to limit any risk, and being knowledgeable about the risks you are taking.

Charting and Technical Analysis and Trading the Trends are an absolute must for every investor. Learn how to invest, when to invest, when to trade, and when to keep your money safe.