4 ms·

The best advice I can give you is to ignore everything in this thread, and talk to a financial advisor that you trust who understands your goals and risk profil

by murtza 13y ago

The best advice I can give you is to ignore everything in this thread, and talk to a financial advisor that you trust who understands your goals and risk profile. To answer your question: Besides the stock market, some other asset classes that you can invest your cash include collectibles (art, coins, stamps), commodities (metals, agriculture), currency (EUR, RMB), bond market, and real estate. A newer asset class is peer to peer lending platforms like Lending Club and Prosper. Like with any type of investing, study the risks associated with the asset class before investing. For anybody interested in alternative asset classes, I recommended reading up on Modern Portfolio Theory. http://en.wikipedia.org/wiki/Modern_portfolio_theory http://en.wikipedia.org/wiki/Modern_portfolio_theory

vladimirralev 13y ago
Finding a financial advisor you can trust is about as hard as doing the portfolio research yourself. It always helps to have more and more sources of data about opportunities. Even if many are outdated, too new or outright scams, it's better to know about them rather than "ignore everything in this thread".
- wikwocket 13y ago
  Start by avoiding anyone who gets a commission on anything they sell you, or a flat percent off the top of your investments. Find someone you pay by the hour.
  - coryl 13y ago
    Why is commission a bad thing?
    - wikwocket 13y ago
      People who get paid a commission to sell you X are motivated to sell you X. Preferably the biggest X possible. As opposed to determining whether X is best for you or even remotely applicable for your situation. For example, there's a saying about whole life insurance policies, that they are not bought, but sold. Meaning that no one goes looking to buy them (because they often perform poorly compared to traditional investments), but agents will often push them on people (due to high commissions). Note that the high commission rate is not unrelated to poor performance as an investment!
      - coryl 13y ago
        That would simply depend on how sleazy the individual or business in question then, right? I don't see commission as the biggest factor of importance when deciding investment vehicles. Your family doctor may get commission on prescription drugs prescribed to you, but that doesn't necessarily mean your doctor is unethical or only self-motivated.
        kalid 13y ago
        Incentives drive behavior (not 100%, but hugely influenced). When real estate agents are incented to sell,your house quickly (vs. at the highest price possible)... they sell your house quickly, and not the highest price possible. For their own houses, they of course go for the highest price. http://freakonomics.com/2008/02/26/real-estate-agents-revisited/ http://freakonomics.com/2008/02/26/real-estate-agents-revisi...
  - ameister14 13y ago
    Why is a percentage bad? If it doesn't take from the principal, wouldn't a percentage of profit be the best incentive for performance?
    - lutusp 13y ago
      > Why is a percentage bad? Because undesirable investments are frequently offered with enticing deals, and good investments aren't. It seems consumers aren't aware of this, only investment counselors.
      - ameister14 13y ago
        How does that make a difference? If I give a financial advisor 10% of all profit I make, and make no profit, he gets nothing. So, he has an incentive to make me money. Why would a deal on the investment make a difference there, and how would paying him by the hour solve this?
        lutusp 13y ago
        > If I give a financial advisor 10% of all profit I make, and make no profit, he gets nothing. So, he has an incentive to make me money. You're missing the point. Your financial situation is not the same as that of your advisor. If you make 8% per annum on a very safe investment, and your advisor makes 1% of your 8%, that might be a good deal for you. If you make 8% on a very unsafe investment and your advisor gets 1% of your 8% plus 10% of the transaction fees under the table, then you and he are no longer on the same page. > Why would a deal on the investment make a difference there, and how would paying him by the hour solve this? See above. And: http://www.marketwatch.com/story/new-credit-card-pitchman-your-adviser-2013-02-26 http://www.marketwatch.com/story/new-credit-card-pitchman-yo... Quote: "The strategy, known on Wall Street as “cross-selling,” helps boost profits by steering customers from a firm’s brokerage operations to its retail and investment banks, and vice versa. Financial advisers benefit by earning bonuses for marketing loan products." The financial advisor gets the bonus, not the investor. The reason the bonus is offered is because the touted transactions are unattractive to anyone who understands the markets, so there has to be an added incentive. In this way, a financial advisor feathers his own nest at your risk and expense. The idea that a financial advisor has only your interests in mind is a myth.
lutusp 13y ago
> The best advice I can give you is to ignore everything in this thread, and talk to a financial advisor that you trust who understands your goals and risk profile. The Wall Street Journal Dartboard Contest proved over and over again, to the point of exhaustion, that investment counselors aren't worth the money. Link: http://online.wsj.com/article/SB10001424127887324504704578410864000872642.html http://online.wsj.com/article/SB1000142412788732450470457841... Title: "Darts Top Readers in Final Print Contest" Quote: " The darts have beaten the readers with 30 wins out of 49 contests." Any questions? More here: http://arachnoid.com/equities_myths http://arachnoid.com/equities_myths

by murtza 13y ago

vladimirralev 13y ago

Finding a financial advisor you can trust is about as hard as doing the portfolio research yourself. It always helps to have more and more sources of data about opportunities. Even if many are outdated, too new or outright scams, it's better to know about them rather than "ignore everything in this thread".

wikwocket 13y ago
Start by avoiding anyone who gets a commission on anything they sell you, or a flat percent off the top of your investments. Find someone you pay by the hour.
- coryl 13y ago
  Why is commission a bad thing?
  - wikwocket 13y ago
    People who get paid a commission to sell you X are motivated to sell you X. Preferably the biggest X possible. As opposed to determining whether X is best for you or even remotely applicable for your situation. For example, there's a saying about whole life insurance policies, that they are not bought, but sold. Meaning that no one goes looking to buy them (because they often perform poorly compared to traditional investments), but agents will often push them on people (due to high commissions). Note that the high commission rate is not unrelated to poor performance as an investment!
    - coryl 13y ago
      That would simply depend on how sleazy the individual or business in question then, right? I don't see commission as the biggest factor of importance when deciding investment vehicles. Your family doctor may get commission on prescription drugs prescribed to you, but that doesn't necessarily mean your doctor is unethical or only self-motivated.
      - kalid 13y ago
        Incentives drive behavior (not 100%, but hugely influenced). When real estate agents are incented to sell,your house quickly (vs. at the highest price possible)... they sell your house quickly, and not the highest price possible. For their own houses, they of course go for the highest price. http://freakonomics.com/2008/02/26/real-estate-agents-revisited/ http://freakonomics.com/2008/02/26/real-estate-agents-revisi...
- ameister14 13y ago
  Why is a percentage bad? If it doesn't take from the principal, wouldn't a percentage of profit be the best incentive for performance?
  - lutusp 13y ago
    > Why is a percentage bad? Because undesirable investments are frequently offered with enticing deals, and good investments aren't. It seems consumers aren't aware of this, only investment counselors.
    - ameister14 13y ago
      How does that make a difference? If I give a financial advisor 10% of all profit I make, and make no profit, he gets nothing. So, he has an incentive to make me money. Why would a deal on the investment make a difference there, and how would paying him by the hour solve this?
      - lutusp 13y ago
        > If I give a financial advisor 10% of all profit I make, and make no profit, he gets nothing. So, he has an incentive to make me money. You're missing the point. Your financial situation is not the same as that of your advisor. If you make 8% per annum on a very safe investment, and your advisor makes 1% of your 8%, that might be a good deal for you. If you make 8% on a very unsafe investment and your advisor gets 1% of your 8% plus 10% of the transaction fees under the table, then you and he are no longer on the same page. > Why would a deal on the investment make a difference there, and how would paying him by the hour solve this? See above. And: http://www.marketwatch.com/story/new-credit-card-pitchman-your-adviser-2013-02-26 http://www.marketwatch.com/story/new-credit-card-pitchman-yo... Quote: "The strategy, known on Wall Street as “cross-selling,” helps boost profits by steering customers from a firm’s brokerage operations to its retail and investment banks, and vice versa. Financial advisers benefit by earning bonuses for marketing loan products." The financial advisor gets the bonus, not the investor. The reason the bonus is offered is because the touted transactions are unattractive to anyone who understands the markets, so there has to be an added incentive. In this way, a financial advisor feathers his own nest at your risk and expense. The idea that a financial advisor has only your interests in mind is a myth.

lutusp 13y ago

> The best advice I can give you is to ignore everything in this thread, and talk to a financial advisor that you trust who understands your goals and risk profile. The Wall Street Journal Dartboard Contest proved over and over again, to the point of exhaustion, that investment counselors aren't worth the money. Link: http://online.wsj.com/article/SB10001424127887324504704578410864000872642.html http://online.wsj.com/article/SB1000142412788732450470457841... Title: "Darts Top Readers in Final Print Contest" Quote: " The darts have beaten the readers with 30 wins out of 49 contests." Any questions? More here: http://arachnoid.com/equities_myths http://arachnoid.com/equities_myths