Their Own Worst Enemy

This article talks about the investors who love to put their blames on their advisers when their investments do not work out. The advisers on the other hand put the blame on the investors suggesting that they are their own worst enemies. There are three main ways through which the advisers suggests the investors damage their own selections; the first is blowing in the wind where the investors are easily influenced by the market situation. They sometimes sell low while they buy high thus encountering losses.

Lee Munson, the owner of Albuquerque once said that the bold and foolish lambs are enticed by noise to each treacherous gulf. The second issue according to Mr. Munson is that the investors buying stocks without examining it methodically and considering how it suits in a portfolio is not a brilliant idea. Note that Mr. Munson was an adviser of a 70-year-old retired multimillionaire and he experienced such things.  The other way is that the investors focus too narrowly. The advisers frequently speak diversification as a means to endure the ups and downs of financial markets.

Another adviser mentioned in the article is Mr. Tuttle who was dealing with an old woman in 80s concerning her gold coins and stocks. He tried to urge her to get rid of some of the gold but it was difficult because she said that the gold never goes down. There are numerous individuals who falls in the same trap. For example, P.J. DiNuzzo, the founder of Investment Advisors Inc. said that most clients have their assortment situated in US without international diversification. His suggestion was that these clients are not focused at all, diversification is brilliant but the investing approach is scattered thus being likely to miss the mark.

The article also talks about a New Providence adviser, James Gallo who says that the investors have no concept of their general allocation and that investment cannot be effective when managed with four different brokers and three different banks. He gives an example of a couple who invested in technology stocks who had lots of problems until they sorted his advice in 2010. He winded up by saying that he is not sure if they will act on his advise but if they do so, their investments will be successful.