By: Rita Warren ~
How do you find “experts” to rely on in the investment world who don’t have a vested interest to sell you a particular product? How can you be sure you are getting a fair representation of what’s out there to invest in?
For example, if I worked for a particular brokerage firm and you came in to see me, I would probably want to sell you my firm’s mutual funds, because I would make more of a commission selling you our own product than the mutual funds belonging to another company. So rather than selecting a mutual fund that was best suited to your financial and situational needs, I would select one according to my financial needs…one that would produce the most financial benefit to me as your broker. Not very beneficial to you, but you might never know unless you asked.
Or, if you were buying stocks and I were an investment advisor who had a hefty investment in XYZ stock already, it would be to my benefit to promote XYZ stock so that its shares would go up. So I would encourage you to buy shares of that same company rather than another company that might be a better fit for your portfolio.
Even reading books by so-called experts can be misleading, because you might never know where hidden agendas lie. Watching television programs with guest hosts can lead you down the wrong path into investing nightmares also. If a television show host wants to stay on the good side of a CEO, he will never criticize the company even if the financial quarterly reports are horrible; instead, he will put a good spin on it and allow the CEOs he interviews to do the same. After all, he doesn’t want to wind up with no interviews on his programs, because day in and day out he has time slots to fill. And he has ratings to achieve. He’s not really out for your investing profit; he’s out for his television career success.
If all of this sounds cynical, that’s because it’s worthwhile to approach “experts” with more than a grain of salt. Check on them to be sure they are not affiliated with the companies that they are discussing. Make sure they have no personal investments in the stocks they are promoting. If they are touting their own mutual funds, find a neutral, objective mutual fund analyzer and see where their mutual funds rank and what the ratings are from those sources, and don’t let their sales pitch sway you. Be your own advocate in all of these instances; don’t let any experts tell you where to put your money, as if they care more about your money and your financial future and success than you do.
Because they don’t.
You care more about your finances than anyone else. You are more concerned with where you invest your money and what your future looks like than any brokerage firm or television show host or newsletter editor. And no one should be as thorough as you when it comes to checking out the expert opinions about your investments.