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Posted: 9/20/2005 5:07:01 AM EDT
Ok, about 3 years ago the wife and I were recommended by a friend to go and talk with a financial advisor from American Express about getting our retirement setup, and we did. The guy we met with totally smoozed us and we ended up investing our money with him in various policies including VUL (Variable Universal Life policies), REITs, Stock Market Certs., and a some mutual funds. Most of our money was going into the VUL. I have never felt 100% comfortable with this guy and what he is doing with our money, but I am skeptical by nature. Now, fast forward 3 years.

We've sat down with another advisor who works for Primerica who was also recommended by a friend. Come to find out, VUL's are one of the worst investment vehicles you can put your money into. She explained the fine print to us, and when we pull it out, which we are going to do, are going to loose a serious chunck of change. The guy from AMEX intially set us up 2 Roth IRA's but has not been allocating any money into it. Our mutual funds have been receiveing basically 1% of our monthly investment and everything else has been going to our VULs.

To make a long story short, if anyone has investments with AMEX or especially in VUL's, re-evaluate it! Have your advisor, or maybe another one, sit down and explain to you why VUL's are better than a term life insurance investment, and then allocate the extra money you save into ROTH IRA's and mutual funds. We have been investing about $600 / month into VULs. We are way over insured, and were quoted a new term policy that gives us actual need coverage at $22 per month per person, so, $44 a month. Thats gives us $556 a month to fill up our Roth IRA and starting building up Mutual Funds.

I felt like I should warn or at least advise everyone on this board that has some type of VUL. If you don't want to change, at least have it looked at. It will be well worth it down the road.

Nick
Link Posted: 9/20/2005 5:16:46 AM EDT
They're not even called American Express anymore. They are called Ameriprise, I thnk that's the spelling.
Link Posted: 9/20/2005 5:17:29 AM EDT
No matter what you're buying, you've got to shop around.
Link Posted: 9/20/2005 5:27:21 AM EDT
This is not going to make you feel better. Go find a independent advisor, they are in the phone book. You need to find one that DOES NO SELLING OF PROUDUCTS. You will end up paying him but his advise is not bias toward his companies goodies and gets no commision. The Dave Ramsey site has lists of certified financial planners of that type. After my dad died my mom got taken for about 200 grand by Merrill Lynch planners.

This is not intended as a slam just some advice from someone who has been there.
Link Posted: 9/20/2005 7:26:47 AM EDT

They're not even called American Express anymore. They are called Ameriprise, I thnk that's the spelling.


Forgot to mention that, I think they changed there name about 4 or 5 months ago.


No matter what you're buying, you've got to shop around.


The company we are looking at now, show us what Ameriprise's (AMEX) commission is when selling the VUL's, something like 4k, plus w/ Amerprise you have to pay $500 / year to have an advisor.
Link Posted: 9/20/2005 7:35:59 AM EDT
I almost pursued a job with AMEX FA last spring. But I had to leave thier meeting early to go watch a championship basketball game

Financial advisors either get paid by comission, or by the hour/flat rate.

There is definently a conflict of interest with the ones who get paid by commission. They get paid more to either 1) hawk the firm's line of investment vehicles or 2)to sell higher risk vehicles.

So if I go to Edward Jones, they get a higher commission to set me up in an Eddy Jones mutual fund than they do anyone elses. Same for any place offering thier "own" products. The other example would be, higher risk mutual funds garner higher commissions.

They are essentially salesmen. Just like car salesmen and gun salesmen, they are in it for themselves and often are ignorant about the product or are flat wrong (at best) and sometimes lie and break the law at worse. They do have to be licensed usually when they work for big firms though.

I can put a sign up on my house saying I'm an independant financial advisor. Anyone can. So going the independant route means you really need to do your due dilliegence and find out thier past. There are a couple websites you can search for registered advisors.

It sucks you got had. Further, annuities and the like are hands down the worst investment I can think of (outside of buggy whips and manual typewriters).

I still might go into that field though
Link Posted: 9/20/2005 7:37:00 AM EDT
Primerica is no prize either Nicholas-there are plenty of horror stories. Naturally they will tell you that your current investment strategy is poor, because they want you to reinvest your assets into their poor investment strategy.

Having one hustler critique the actions of another hustler isn't going to do you any favors.

Hiring an independent advisor who is not a shill for their own investment products is good advice.
Link Posted: 9/20/2005 7:41:00 AM EDT

Originally Posted By jcncc:
This is not going to make you feel better. Go find a independent advisor, they are in the phone book. You need to find one that DOES NO SELLING OF PROUDUCTS. You will end up paying him but his advise is not bias toward his companies goodies and gets no commision. The Dave Ramsey site has lists of certified financial planners of that type. After my dad died my mom got taken for about 200 grand by Merrill Lynch planners.

This is not intended as a slam just some advice from someone who has been there.



Ditto. I manage 401(k) plans, so I have exposure to the industry but we don't advise.

They use products like this for the high commision rate-your guy has been cleaning up on you, sorry to say.

Ask your doctor who he uses, best advice I've heard to find a good advisor.
Link Posted: 9/20/2005 7:41:28 AM EDT

Originally Posted By CJan_NH:
Primerica is no prize either Nicholas-there are plenty of horror stories. Naturally they will tell you that your current investment strategy is poor, because they want you to reinvest your assets into their poor investment strategy.

Having one hustler critique the actions of another hustler isn't going to do you any favors.

Hiring an independent advisor who is not a shill for their own investment products is good advice.



+1. Just because the new guy says that your old investments suck, does not make it so. You need someone who is looking out for your interests alone.
Link Posted: 9/20/2005 7:42:13 AM EDT
My advice is to talk to people who have their accounts in order and ask for a referral.
Link Posted: 9/20/2005 7:46:39 AM EDT
Most of those companies are just like car dealerships.

If you go to the Ford dealer, he will want to sell you a brand new Ford. But, if you go to the Chevrolet dealer, he will tell you how bad a Ford is and that you need to buy a Chevy.

Just about all of them have a vested interest to sell you THEIR product and everyone elses product sucks.

Like the others said, shop around and/or find an advisor who is not hawking his own companies stuff and getting a fatter commission to boot.
Link Posted: 9/20/2005 7:56:45 AM EDT
I would stay away from Primerica also........
Link Posted: 9/20/2005 8:08:46 AM EDT

Originally Posted By jcncc:
This is not going to make you feel better. Go find a independent advisor, they are in the phone book. You need to find one that DOES NO SELLING OF PROUDUCTS. You will end up paying him but his advise is not bias toward his companies goodies and gets no commision. The Dave Ramsey site has lists of certified financial planners of that type. After my dad died my mom got taken for about 200 grand by Merrill Lynch planners.

This is not intended as a slam just some advice from someone who has been there.



ML does not police their people very well. I know a few people who lost way more under similar circumstances. This taught me several things. First, you really need to get the better half involved with the money or you need to take it out of her hands because some day she is going to find you slumped over in your chair with a burned-out corona corona and an annual report in your lap, deader than Elvis. If your wife suddenly has to make financial decision and she has never done so before, mistakes will be made. Potentially large mistakes. If you have a trust already set up (which I would recommend, even to people with much less money), that takes this out of her hands, because you are essentially investing for your children. Or, you can make her a part of the process and try to impart some of your suspicion to her. I have seen this work very well as well. Second, you need to make sure that you have some kids with a killer instinct to go after people like this if it happens that way. The few times that the children or grandchildren have gone after ML (or Prudential, in once case) and the brokers, they got every cent back plus legal fees. Remember, justice is often what you can afford, and if the amount is large enough to fight over, it is large enough to attract skilled legal help.

The advice about independant advisors is good. Spend some time shopping around, though, and do a lot of reading yourself. Get a broker who will answer your questions in detail. If they won't, they probably don't know the answer and they are just a saleman in a better suit and you are essentially on your own (and would do just as well buying from Schwab or some other discounter).
Link Posted: 9/20/2005 8:10:50 AM EDT
The big investment houses are looking out for thier bottom line, not yours. Thier "financial advisors" are really just salesmen with a few days worth of training to teach them the basics. They invest your money where they make the most commission.

The only success I've had is to find a CPA who also is "Certified Financial Planner". They are numbers guys who either charge you a flat fee, or better yet a percentage (2%) of your investment. If they want to make more money they have to increase your investment.

It took me a few yrs to figure out the Financial Advisor scam, and another couple to find a good CPA/CFA.

Best of luck....
Link Posted: 9/20/2005 8:15:39 AM EDT
Let me guess you're being roped by a 12% return on your investment into Citigroup. Thats who Primerica is.
Link Posted: 9/20/2005 8:19:28 AM EDT

Originally Posted By AmericanPatriot1776:
I would stay away from Primerica also........



I went to a Primerica recruiting session. They are one huge pyramid scheme. Their whole goal in life is to recruit part-time "feet on the street" to sign you up for THEIR products and services. That's how they make their money.

You get told to refinance your house, with THEIR mortgage company.

You buy stocks from THEIR brokers.

They, and most others like them, are a huge scam.

Check into HarrisDirect.com. They can do managed services for you for a flat annual fee. This keeps them from churning your account and buying/selling "their" products to make a profit.

Or spend $10 for a "Dummies" book and learn how to invest on your own.
Link Posted: 9/20/2005 8:29:39 AM EDT
Any big investment advise firm has other motives. They have incentives to get you to invest in certain things.

Don't trust ANYONE with your money especially your retirement money. Even independant investors have no stake in whether you make money or not.

It is up to YOU to ensure your investments are set up accordingly and you are comfortable with the risk involved with each of them.

Link Posted: 9/20/2005 9:02:02 AM EDT
Might want to check into fee based advisors..you pay a small perecentage (like a fraction of a percent IIRC) of what your account is worth every year. No commission after that..They make more money only if the value of your account goes up
Link Posted: 9/20/2005 9:28:10 AM EDT
About 5 yrs ago in a universe far from here, I was married and we both had very good jobs. I talked with American Express Financial because I just had the feeling we could do better than what we were doing. What a plan they came up with ! Bottom line was that out of $2400/mo that could be earmarked for savings, $2100 was for various forms of insurance.

I walked out without answering their questions as to where I was going.
Link Posted: 9/20/2005 9:45:17 AM EDT
I have been using an Ameriprise advisor for about 8 years now. I'm happy with it. They can sell you any mutual fund on the market, its better than it was.

Sounds like you have a bad advisor, fire him, and get another.

Link Posted: 9/20/2005 9:51:23 AM EDT
Been there, done that... and it hurts.

My experience with Merrill Lynch was bad enough to get me to change and walk away from a broker I went to church with as a kid. That led me to Edward Jones. My experience is poor with them as well. During my initial consult with them, they could buy me "any fund or index" I wanted to get. After I sign up, I go back with a detailed list that I want to invest in, and the song changes to "they're not on our preferred list of funds".

I have since decided to go it on my own, because I can select the funds and indexes I want while looking at the actual fees associated with holding those investments. I've found that the information in the offices doesn't reflect the true expense ratio- I saw one that claimed fund expenses of 1.1%... which is fine, as long as you don't look at the 12b1 fees and everything else they neglected to mention.

I subscribe to Kiplinger's and Money, and I do a lot of online research for data.

As an aside, a lot of indexes have GREAT expense ratios.

Good luck.
-Hobbit
Link Posted: 9/20/2005 9:55:30 AM EDT

Originally Posted By blackta6:
Let me guess you're being roped by a 12% return on your investment into Citigroup. Thats who Primerica is.



I understand that another broker is going to say whatever he/she can about my current investment in order to get my business and money. Primerica is saying 12% return, of course, which is also what AMEX is saying I am making. But it is 12% on money I will never see due to the way my VUL is set up.

As far as insurance, is term better than variable universal life? To me, it just does not make sense to try and bundle a life insurance policy with an investment account. Seems they should be two seperate vehicles. Primerica is saying I need to go w/ term, max out both my mine and my wifes Roth IRA's, and invest in mutual funds (in a nutshell). To me, this seems more logical.

What does the hivemind say?
Link Posted: 9/20/2005 10:00:06 AM EDT

Originally Posted By AmericanPatriot1776:
I would stay away from Primerica also........



Why? Just trying to feel this out. I understand they are going to try and sell me their funds, but from what I have seen, their plan seems a lot better than AMEX. Thats not to say I am going to go w/ them, I will talk to an independent, just trying to get a feel on who has been taken by Primerica and what happened.

Nick
Link Posted: 9/20/2005 10:42:21 AM EDT
When you talk to your new advisor ask him what he thinks of ETF's. Most commision guys avoid them like poison. The CPA who put a stick in Merrills eye on behalf of my mom loves them. Low cost, low commision, low tax consquence. Etf's cover everything from high tech widgets to basic materials like aggragates.
Link Posted: 9/20/2005 10:49:35 AM EDT
[Last Edit: 9/20/2005 10:53:27 AM EDT by blackta6]
I can't say that I know of anyone that has been taken. At the moment I have a buddy that has started "selling" Primeica. The situation his family was in needed improvement, Primerica was able to deliver for him. They couldn't afford their morgage, had no investments for retirement, no life insurance, and a high amount of consumer debt. Nearing a 100,000 with the house. Not suprising for a 20 something.

Now what Primerica did for him was asses the house grossly out of range, refinance the consumer debt, and morgage into one at a lower interest rate. Him and his wife now have life insurance and are setting some money aside for retirement. Oh, he was paid some money for all of this too.

But if you don't have all those problems, you don't need Primerica/Citigroup. If you're just looking for something to do with you're retirement funds I would say go with a CPA/CFA.

I have heard of some Free Christian Financial Advisors, I meet one once and got info. for my situation, but forgot to get more info on the group.
Link Posted: 9/20/2005 11:25:41 AM EDT
For the love of GOD stay away from Primerica!

Or, at the VERY LEAST type Primerica into google!

Primerica is like the Amway of the financial world. Run, Forrest, RUN!
Link Posted: 9/20/2005 1:39:59 PM EDT

Originally Posted By jcncc:
When you talk to your new advisor ask him what he thinks of ETF's. Most commision guys avoid them like poison. The CPA who put a stick in Merrills eye on behalf of my mom loves them. Low cost, low commision, low tax consquence. Etf's cover everything from high tech widgets to basic materials like aggragates.



Is it a mutual fund?
Link Posted: 9/20/2005 1:48:01 PM EDT
An ETF is an exchange traded fund.

Essentially, mutual funds that are bought and sold like stocks. Much lower transaction fees, you can get in and out of them easier, etc. Also, if you want to own some of a sector that you dont know anything about, you can just pick an ETF that is a basket of that sector.
Link Posted: 9/20/2005 1:53:27 PM EDT

Originally Posted By TimJ:

Originally Posted By jcncc:
This is not going to make you feel better. Go find a independent advisor, they are in the phone book. You need to find one that DOES NO SELLING OF PROUDUCTS. You will end up paying him but his advise is not bias toward his companies goodies and gets no commision. The Dave Ramsey site has lists of certified financial planners of that type. After my dad died my mom got taken for about 200 grand by Merrill Lynch planners.

This is not intended as a slam just some advice from someone who has been there.



Ditto. I manage 401(k) plans, so I have exposure to the industry but we don't advise.

They use products like this for the high commision rate-your guy has been cleaning up on you, sorry to say.

Ask your doctor who he uses, best advice I've heard to find a good advisor.



Doctors are the worst investors there are followed by attorneys. See what they do and run
Link Posted: 9/20/2005 2:00:34 PM EDT

Originally Posted By alaman:
Doctors are the worst investors there are followed by attorneys. See what they do and run

I've heard that, too!
Link Posted: 9/20/2005 2:03:17 PM EDT
What a bunch of goddamn hustlers!

It sounds like you'd almost have better odds on the tables in Vegas. If you lose it all, you'll at least get a buffet voucher.
Link Posted: 9/20/2005 2:10:31 PM EDT

Originally Posted By KlubMarcus:
My advice is to talk to people who have their accounts in order and ask for a referral.



Thats how I found this guy w/ AMEX, was refered by someone who THOUGHT their accounts were in order.
Link Posted: 9/20/2005 2:16:00 PM EDT
I dont know much about any of this but I do know Primeamerica is a pyramid scheme...who will hire anyone if they pay enough for classes...

Trust me....if any of you have seen DrFriges posts about his friend with the crazy wife...both are primeamerica sales people.....

They literally go door to door trying to sell things....from refinancing to pre-paid legal.
Link Posted: 9/20/2005 2:20:17 PM EDT
Can anyone really tell me the important questions that I need to ask a finacial advisor so that I know I am not going to be taken to the cleaners (again). I have handled my debt responsibly and therefore I am not burdened w/ extra debt right now (beside mortgage and car loans which are at very good rates).

It seems to me, first and foremost, maxing out the Roth IRA should be done.
Secondly, deversifying in moderate to aggressive mutual funds (leaning more towards aggressive) that are proven performers. Problem is narrowing down which mutual funds to look at. Crazyquik suggested ETF's, I will look into those as well.

I just want to make sure I am investing in something that is worth while and in my best interest and not just lining the pockets of my advisor.
Link Posted: 9/20/2005 2:32:26 PM EDT
Insurance as an investment is a fraud.

Get good insurance yes, term life insurance to cover your family when you check out.

Invest your money in other vehicles (not cars you ninny); stocks, bonds, etc. 401k is great esp. when matched. Roth, yes is very very good.

That's my .02
SoS
Link Posted: 9/20/2005 2:37:38 PM EDT
Dave says
1. pay off everything but the house
2. save 3 to 6 months in a emergency fund should be equal to your combined paychecks
3. max out the roth's
4. invest in balanced mutal funds they contain stocks,bonds and money markets.

Not a method for large return BUT not much risk.
Link Posted: 9/20/2005 3:14:34 PM EDT

Originally Posted By jcncc:
Dave says
1. pay off everything but the house
2. save 3 to 6 months in a emergency fund should be equal to your combined paychecks
3. max out the roth's
4. invest in balanced mutal funds they contain stocks,bonds and money markets.

Not a method for large return BUT not much risk.



This is exactly what I was thinking.

Now I just have to find some good no load mutual funds with an annual expense ratio below 1.5% (more like .50 or less) that has a good 10 year track record and a fund manager that knows what he is doing. That shouldn't be too hard, right!
Link Posted: 9/20/2005 3:32:40 PM EDT

Originally Posted By jcncc:
Dave says
1. pay off everything but the house
2. save 3 to 6 months in a emergency fund should be equal to your combined paychecks
3. max out the roth's
4. invest in balanced mutal funds they contain stocks,bonds and money markets.

Not a method for large return BUT not much risk.



I think Dave would tell you to pay off the house. I still do not know which way to go on that one...

Bob
Link Posted: 9/20/2005 3:37:22 PM EDT
Okay I'll go out on a limb, walk the plank or whatever you want to call it. I like the Value line family of funds. They use a oldie moldy mathmatical system that has been making money since before you and I were born. I like VALIX, VLEOX,VALSX. Past performace can not guarantee future earnings. I also like the ETF's XLE,XLU. I have made great money in oil and utilities. BORING. Remember advice is worth what you pay for it.
Link Posted: 9/20/2005 3:37:27 PM EDT
My dad works part time for Primerica, he would cringe and turn 3 shades of yellow if he read this.
Link Posted: 9/20/2005 3:45:34 PM EDT
Do any of you have experience with WM Financial (Washington Mutual)?
Link Posted: 9/20/2005 3:45:44 PM EDT
[Last Edit: 9/20/2005 3:52:26 PM EDT by TRW]
I'm 45 years old and been investing off and on since I was 18.

I do all my own research and make all the decisions.

I avoid brokers.

My investment portfolio consists mostly of diversified, high yield, blue chip stocks, that I purchase directly through company sponsered direct investment (DRIP) plans. Most companies have them. The dirty little secret is that brokers don't want you to know that. Why do you think they are called BROKErs.

You can eliminate the middleman...if you choose to do so.

IM me if you want more info.

BTW: I also hate avoid mutual funds. Somebody else besides me making the decisions.....
Link Posted: 9/20/2005 3:53:16 PM EDT

Originally Posted By Ky_Bob:

Originally Posted By jcncc:
Dave says
1. pay off everything but the house
2. save 3 to 6 months in a emergency fund should be equal to your combined paychecks
3. max out the roth's
4. invest in balanced mutal funds they contain stocks,bonds and money markets.

Not a method for large return BUT not much risk.



I think Dave would tell you to pay off the house. I still do not know which way to go on that one...

Bob



Paying off the house isnt' an option right now, nor is paying off mine or my wife's vehicle. I feel that I will always have a mortgage payment and most likely a vehicle payment. I do however refuse to carry a balance on any credit card or carry consumer debt of the like.
Link Posted: 9/20/2005 4:04:02 PM EDT
[Last Edit: 9/20/2005 4:07:58 PM EDT by jbombelli]

Originally Posted By Nicholastheczar:

Originally Posted By blackta6:
Let me guess you're being roped by a 12% return on your investment into Citigroup. Thats who Primerica is.



I understand that another broker is going to say whatever he/she can about my current investment in order to get my business and money. Primerica is saying 12% return, of course, which is also what AMEX is saying I am making. But it is 12% on money I will never see due to the way my VUL is set up.

As far as insurance, is term better than variable universal life? To me, it just does not make sense to try and bundle a life insurance policy with an investment account. Seems they should be two seperate vehicles. Primerica is saying I need to go w/ term, max out both my mine and my wifes Roth IRA's, and invest in mutual funds (in a nutshell). To me, this seems more logical.

What does the hivemind say?



First and foremost, insurance is not meant as an investment product. It is insurance. Plain and simple. Variable policies were invented for those people who lack the discipline to save money on their own. Generally, when I was in this business, I usually recommended term insurance (depends on a number of factors), and IF SUITABLE, securities.

It makes sense to max out both your IRAs, and any 401(k), 403(b), or 457 (DCP) that you may be able to use. After that, set aside a MINIMUM of 6 months worth of expenses, IN CASH (savings account or something similar). Once you have done that, you are in a better position to invest in securities. It really sucks to suddenly find that you need to liquidate some positions in order to make ends meet. Especially when the market is down.

Another thing... just about every larger firm out there looks out for themselves first, and you second. Whatever mutual fund you may decide to look at, READ THE PROSPECTUS, COVER TO COVER. Don't skip anything. I can't believe how many people don't read those. Also, if you're considering mutual funds, make sure to check out the performance history of the fund manager, not just the fund itself as they often change managers.

And be careful with those, too. I have seen MANY occasions wherein somebody has a mutual fund position, lose money, and end up having to pay capital gains taxes. It works kind of like this (simplified): You have $10,000 in a mutual fund. The position loses $6000 this year. But... the fund manager placed SOME profitable trades. He sent you $3000.00. You have to pay taxes on that $3000, even though you realized a NET LOSS OF $3000. Consult a tax advisor for more info.

As others have said, as a former broker I would find myself a CPA with insurance and securities licenses, or an independent fee-based advisor, who charges a percentage of your account value. If he loses you money, his pay goes down.

All that said, I do my own investing, and make my own decisions. The absolute best thing you can do is educate yourself.
Link Posted: 9/20/2005 4:13:20 PM EDT
[Last Edit: 9/20/2005 4:20:34 PM EDT by crazyquik]

Originally Posted By Nicholastheczar:
It seems to me, first and foremost, maxing out the Roth IRA should be done.
Secondly, deversifying in moderate to aggressive mutual funds (leaning more towards aggressive) that are proven performers. Problem is narrowing down which mutual funds to look at. Crazyquik suggested ETF's, I will look into those as well.



Ok I'll try my hand. I have no idea how old you are, or how much debt you have. I would agree to pay off most or all of your debt other than the house or other real estate properties.

Max out your Roth. Make sure this is a diversified basket of stocks. If you're buying soon, shy away from housing, airlines, and consumer discretionary. Personally I dont like pharma either, or anyone that is going to get pinched by high transport costs due to gas and diesel. Stay diversified, but possibly a slight overweight in things that come out of the ground (oil, natural gas, coal, industrial metals, etc). Try not to buy these on the days they hit thier high for the year, but dont get discouraged if they slip a little either. All of these should grow for the next several years. Or you could get a natural resources mutual fund or ETF to take care of that sector for you (do you really know the difference between oil exploration, oil drillers, oil transport, and oil refiners to make an investment?)

Dont get overdiversified though. 5-10 stocks is probably the perfect range for most people (unless you bought something a long time ago and are just going to sit on it and collect the dividend and it is a solid boring stock).

The housing boom is over. No matter what you read, its over. It's been over, most people dont realize that yet though. New home starts are down for the 2nd month in a row, home inventories are the highest they've been since May of 1988. This is bad news if you own a company that is a home builder (they've been down for 3 days in a row, all of em), or one that makes windows and carpet, etc. Interest rates went up to 3.75% today, but the cost of building materials and gas keep going up month after month. Lumber, gravel, gypsum, cement, etc. Blame China.

Dont buy stocks of Chinese companies. Focus on stocks in the US and maybe Canada. You can dabble in Western Europe too. Just remember that many of those countries are socialist pooh-holes and have stagnent economies, but at least they are politically stable. Eastern Europe is a great "growth area" according to some but you run the risk of inflation and currency issues there because they're relatively weak and less stable than the US, Canada, Austrailia, and Western Europe. We know Vladimir Putin wont think twice about nationalizing a company, so stay away from Russia. I'll say again, stay away from China too (but others will tell you to jump in with both feet). If you want a hot piece of the India action, stick with a big bank or utility or natural resource play (something that wont crash if one industry crashes, one patent messes up, one lawsuit, etc). Avoid trying to jump on that hot Indian soccer ball company or tech outsourcing company. An ETF, index fund, or certain mutual fund might be the best way to get exposure to Western Europe, India, Canadian natural resources, etc if you dont feel like ferreting out all the info yourself.

The older you are the more conservative your picks should be. As you get older you'll want more bonds. If I was 55, I would probably own a significant amount of them. I'm about half that age so I dont own any. I have a lot of "risk tolerence" because I still have decades to earn money. When you get old enough to get a discount at McDonald's, you might want to switch into "widow and orphan" stocks like utilities, perhaps railroads, Johnson & Johnson (not a bad choice for anyone I dont think), Procter & Gamble, General Electric, etc etc. Leave the red-hot tech stocks and biotechs for the young people that an afford to lose it all when someone else beats your stock to a patent.

Try to predict the future. If gas is $3 a gallon or more, are you going to shop at Whole Foods to buy organic wheatgrass juice? Are you going to jump in your car to go buy a $7 coffee at Starbucks? Will high gas mean less road trips, so less people driving by Cracker Barrel? What will they do when they stay at home? Will teenagers who are paying to fill up the tank on thier first car keep shopping at Abercrombie & Fitch or will they switch to Aeropostale/Old Navy? I would say no, which is why I wouldn't touch these type stocks right now (or for a while).

Watch Mad Money on CNBC for a week. It comes on at 6, 9, and maybe midnight each night. Jim Cramer is the host and its not like a boring stock show. You can learn a lot. If you dont know what someone says, go to www.investopedia.com and look it up in thier dictionary. Skip coming to General Discussion for one day and go read articles there (about everything from the bare bones basics to stuff you'd never care to know.)

I mentioned a few mutual funds maybe, but dont go crazy on them! I think they are best only when you want exposure to one sector that you dont understand. You can do better by picking stocks. In fact, you can do better by just buying the stocks that sell mutual funds because its such a hot businesses Fund companies dont want to tell you that some of them spend more on advertisement than on research, and that thier stock often outperforms thier premier funds.

Disclosure: you read this on the internet for free, meaning this is worth barely more than if you heard it at a gun show. Do your homework! My Roth IRA right now contains a natural gas stock, a diversified manufactor (air tools, compressors, generators, airport security crap, cryogenic freezing crap, etc), a company that sells investment products to rich people like hedge funds, and a company that owns a lot of land and trees, and uses the trees to make plywood and stuff. Today two went up, and two went down.

As above, I dont use a big broker service or an advisor. I just use an online broker for low flat fees on trades.

Link Posted: 9/20/2005 4:22:39 PM EDT
Crazy you the man. Same stuff I have been thinking for the last three months.
Link Posted: 9/20/2005 4:28:27 PM EDT
Personally, I don't think you can go very wrong with the basics: slap a bunch of money into your 401(k) and Roth. Buy low-cost ETFs or index funds for stocks and bonds, split roughly 60-40. Rebalance your account once a year to retain the 60-40 split. Leave the money the hell alone until you retire.

ETFs are very low cost alternatives to mutual funds. Mutual funds charge management fees, and though 1% may seem small, it adds up to a lot over 20 years. ETFs have very low fees even compared to index funds.

Most managed mutual funds do not beat the market, especially once their fees are figured in. Most people are lousy at picking when the next recession will happen, and lousy at picking stocks.
Link Posted: 9/20/2005 4:36:53 PM EDT
I appreicate everyone's comments, it has been helpful. I have a money market account setup currently that I will be moving as well. Has anyone ever used Emigrant Direct before as a savings account? They are offering 4.0%, which isn't bad at all for a highly liquid account with no fees. Something else to consider. This whole thing with AMEX has really got me looking.
Link Posted: 9/20/2005 4:48:12 PM EDT

Originally Posted By crazyquik:
I almost pursued a job with AMEX FA last spring. But I had to leave thier meeting early to go watch a championship basketball game

Financial advisors either get paid by comission, or by the hour/flat rate.

There is definently a conflict of interest with the ones who get paid by commission. They get paid more to either 1) hawk the firm's line of investment vehicles or 2)to sell higher risk vehicles.

So if I go to Edward Jones, they get a higher commission to set me up in an Eddy Jones mutual fund than they do anyone elses. Same for any place offering thier "own" products. The other example would be, higher risk mutual funds garner higher commissions.

They are essentially salesmen. Just like car salesmen and gun salesmen, they are in it for themselves and often are ignorant about the product or are flat wrong (at best) and sometimes lie and break the law at worse. They do have to be licensed usually when they work for big firms though.

I can put a sign up on my house saying I'm an independant financial advisor. Anyone can. So going the independant route means you really need to do your due dilliegence and find out thier past. There are a couple websites you can search for registered advisors.

It sucks you got had. Further, annuities and the like are hands down the worst investment I can think of (outside of buggy whips and manual typewriters).

I still might go into that field though



+1, I got recruited by them out of college and my major wasn't even close to finance/business. I thought it was scary that a company wanted someone with no formal education of finace to give advice on finances.
Link Posted: 9/20/2005 4:56:01 PM EDT

Originally Posted By crazyquik:

Originally Posted By Nicholastheczar:
It seems to me, first and foremost, maxing out the Roth IRA should be done.
Secondly, deversifying in moderate to aggressive mutual funds (leaning more towards aggressive) that are proven performers. Problem is narrowing down which mutual funds to look at. Crazyquik suggested ETF's, I will look into those as well.



Ok I'll try my hand. I have no idea how old you are, or how much debt you have. I would agree to pay off most or all of your debt other than the house or other real estate properties.

Max out your Roth. Make sure this is a diversified basket of stocks. If you're buying soon, shy away from housing, airlines, and consumer discretionary. Personally I dont like pharma either, or anyone that is going to get pinched by high transport costs due to gas and diesel. Stay diversified, but possibly a slight overweight in things that come out of the ground (oil, natural gas, coal, industrial metals, etc). Try not to buy these on the days they hit thier high for the year, but dont get discouraged if they slip a little either. All of these should grow for the next several years. Or you could get a natural resources mutual fund or ETF to take care of that sector for you (do you really know the difference between oil exploration, oil drillers, oil transport, and oil refiners to make an investment?)

Dont get overdiversified though. 5-10 stocks is probably the perfect range for most people (unless you bought something a long time ago and are just going to sit on it and collect the dividend and it is a solid boring stock).

The housing boom is over. No matter what you read, its over. It's been over, most people dont realize that yet though. New home starts are down for the 2nd month in a row, home inventories are the highest they've been since May of 1988. This is bad news if you own a company that is a home builder (they've been down for 3 days in a row, all of em), or one that makes windows and carpet, etc. Interest rates went up to 3.75% today, but the cost of building materials and gas keep going up month after month. Lumber, gravel, gypsum, cement, etc. Blame China.

Dont buy stocks of Chinese companies. Focus on stocks in the US and maybe Canada. You can dabble in Western Europe too. Just remember that many of those countries are socialist pooh-holes and have stagnent economies, but at least they are politically stable. Eastern Europe is a great "growth area" according to some but you run the risk of inflation and currency issues there because they're relatively weak and less stable than the US, Canada, Austrailia, and Western Europe. We know Vladimir Putin wont think twice about nationalizing a company, so stay away from Russia. I'll say again, stay away from China too (but others will tell you to jump in with both feet). If you want a hot piece of the India action, stick with a big bank or utility or natural resource play (something that wont crash if one industry crashes, one patent messes up, one lawsuit, etc). Avoid trying to jump on that hot Indian soccer ball company or tech outsourcing company. An ETF, index fund, or certain mutual fund might be the best way to get exposure to Western Europe, India, Canadian natural resources, etc if you dont feel like ferreting out all the info yourself.

The older you are the more conservative your picks should be. As you get older you'll want more bonds. If I was 55, I would probably own a significant amount of them. I'm about half that age so I dont own any. I have a lot of "risk tolerence" because I still have decades to earn money. When you get old enough to get a discount at McDonald's, you might want to switch into "widow and orphan" stocks like utilities, perhaps railroads, Johnson & Johnson (not a bad choice for anyone I dont think), Procter & Gamble, General Electric, etc etc. Leave the red-hot tech stocks and biotechs for the young people that an afford to lose it all when someone else beats your stock to a patent.

Try to predict the future. If gas is $3 a gallon or more, are you going to shop at Whole Foods to buy organic wheatgrass juice? Are you going to jump in your car to go buy a $7 coffee at Starbucks? Will high gas mean less road trips, so less people driving by Cracker Barrel? What will they do when they stay at home? Will teenagers who are paying to fill up the tank on thier first car keep shopping at Abercrombie & Fitch or will they switch to Aeropostale/Old Navy? I would say no, which is why I wouldn't touch these type stocks right now (or for a while).

Watch Mad Money on CNBC for a week. It comes on at 6, 9, and maybe midnight each night. Jim Cramer is the host and its not like a boring stock show. You can learn a lot. If you dont know what someone says, go to www.investopedia.com and look it up in thier dictionary. Skip coming to General Discussion for one day and go read articles there (about everything from the bare bones basics to stuff you'd never care to know.)

I mentioned a few mutual funds maybe, but dont go crazy on them! I think they are best only when you want exposure to one sector that you dont understand. You can do better by picking stocks. In fact, you can do better by just buying the stocks that sell mutual funds because its such a hot businesses Fund companies dont want to tell you that some of them spend more on advertisement than on research, and that thier stock often outperforms thier premier funds.

Disclosure: you read this on the internet for free, meaning this is worth barely more than if you heard it at a gun show. Do your homework! My Roth IRA right now contains a natural gas stock, a diversified manufactor (air tools, compressors, generators, airport security crap, cryogenic freezing crap, etc), a company that sells investment products to rich people like hedge funds, and a company that owns a lot of land and trees, and uses the trees to make plywood and stuff. Today two went up, and two went down.

As above, I dont use a big broker service or an advisor. I just use an online broker for low flat fees on trades.




Crazy -

Thanks for the input. Good write up and thanks for the link, exactly what I needed to help decypher some of the terms and verbage!
Link Posted: 9/20/2005 4:56:09 PM EDT

Originally Posted By Nicholastheczar:
Thats how I found this guy w/ AMEX, was refered by someone who THOUGHT their accounts were in order.

Ouch! Did you talk to your friend and tell him to shop around?
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