Your Broker isn't a Crook - He is Ignorant

By: Al Thomas
Submitted: 2007-01-17 16:17:39
Print this article | Tell a friend | For publisher | Social Bookmarking
Rating:
 

Why does Wall Street hate me? Because I tell the truth and truth is something they can’t abide. The little guy (that’s someone with less than a 7-figure account) gets no real help. Every small investor is a Rodney Dangerfield. If Joe Sixpack happens to make a few bucks they will take credit for helping him, but when he loses his money as he did in the bear market of 2000 – 2002 that is not their fault.

The little guy with the $5,000-$50,000 account could have been saved and his losses kept at about 10% if the moguls in New York had instructed their brokers how to protect customer’s funds. It is not done and has never been done.

Don’t look to the Securities and Exchange Commission (SEC) for help. Instead they are trying to regulate the hedge funds which are playgrounds for the multirich. What nonsense. Let the rich take care of themselves.

Today 50% of all home owners own stocks and/or mutual funds either individually or in a tax shelter such as a 401K. About 80% of these plans have less than $50,000 and no one is looking after them. I mean no one. People at work think they have a money manager and what they really have is a money mangler. They have no idea what to do when the bear returns – as it is now.

These manglers have no experience with bear markets and have never seen one. The drop in 2000 of 78% by the NASDAQ was laid to speculation when it was actually the first phase of a 16 year long bear market. Did they protect the guy who was NOT speculating? No. Because they didn’t know how and still don’t.

Has any Wall Street firm held a single seminar to teach their brokers how to protect customer’s money? Not one that I know of. You have to it yourself because your broker is ignorant.

During the next major down swing the safest place for investor money is not in the stock market. It is in a U.S. Treasury bond (no other kind) or a big bank CD. Brokers are taught to tell you you can’t afford to be out of the market. Of course not because they don’t make any money when you are in cash. Cash at zero percent will have a greater return over the next 2 years than any stock or mutual fund. See if you can get that kind of guarantee from your broker. You can’t.

You and only you can protect your money. Don’t rely on your smooth talking broker. You must now decide before it is too late how much you are willing to risk. If your account is $50,000 would about $5,000 or 10% be as much as you are willing to give back? Whatever amount you set then tell your broker you want a stop loss order entered. He won’t like it, but that is his job.

Do not let ignorance steal your money.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Article source: Expert Articles

Most Recent Articles in Personal Finance category

  • How Not to Blow the Student Budget - By: Victoria Cochrane
    Student life is great. The associated costs however, are not. Read on to find out how you can make the most of your student budget.
  • Promote Your Property with a Personal Loan - By: Paul McIndoe
    Selling property entails much consideration from redecoration to refurbishments, sprucing up the garden and advertising your abode to potential buyers. A personal loan may be just the ticket you need to get on the road to property selling success.
  • How to Keep Track Of Outstanding Balances - By: Adam Singleton
    It's easy to whip out a credit or store card to pay for something, but knowing what you will be paying in interest is vital if you do it all the time. Here are some tips to make sure you stay on top of things.
  • Budgeting For Retirement - By: Jeff Nelson
    Retirement can be a great experience if you plan for it, don't let planning for the rest of your life slip away from you.
  • Planning a Vacation on a Budget - By: Jeff Nelson
    Planning a family vacation on a budget can be very easily if you take these few steps into consideration when planning!
  • Top Tips on How to Budget your Money - By: Jeff Nelson
    Attitude is an extremely important factor in determining the success of your budget. Make sure that you start your financial planning with the right attitude.
  • From Chip and Pin, to Wave and Pay: the Cashless Society of the Future - By: Adam Singleton
    Whilst some predictions of a cashless society by 2012 may be a little wide of the mark, it certainly looks a probability at some point, thanks to the ubiquity of chip-and-pin technology, and the development of new 'wave-and-pay' technology.
  • Economic Crisis Spurs Importance of Budgeting - By: Jeff Nelson
    The importance of budgeting is now being seen as the economic crisis is affecting the daily lives of all Americans. Be smart with your money and determine your budget with help from useful tools on the Internet.
  • Speedy solutions for modern-day madness - By: Isla Campbell
    With speed and security two of its biggest advantages, the contactless credit card is a great way to eliminate such tedious activities as queuing and carrying small change. Read on to find out how it can revolutionise your shopping experience.
  • Going Green on Strict Budgets - By: Jeff Nelson
    By going green you will not only help the environment you will save money on your monthly budgets.