Finding An Advisory Service
It depends on your level of understanding of the market and the amount of money you have. If you a sophisticated investor with a substantial amount invested you are probably already receiving more than one. If you have very little market savvy it will be difficult to choose one that fits the size of your portfolio. If you are just getting started my advice is don’t buy one – yet.
In the last 100 years we have had 30 bear markets which are defined as the overall market going down more than 20 percent and some more than 40 percent. The NASDAQ recently tumbled 78{3b63f2b93addb01cd0650b04902555609b90507e3f2ce2f684711c3a8631e3e2}. Even the best stocks and mutual funds will go down in a bear market because they act like ships – when the tide goes out all ships go down with it. You don’t want to have any market positions at that time.
Most of the advice is Wall Street goobledegook and most of the remainder is stuff you can’t use anyway. Even the simplest letters have too much information and require more time than most working people have to act upon their recommendations.
The first basic advisory service should be for market timing. Check their claims and actual track record. Then as you learn more you may expand your horizon to picking individual issues or mutual funds. Using your computer search engine such as Google type in market timing advisory service and you will receive many replies.
Almost every broker will tell you it can’t be done. He tells you that because he doesn’t know how to do it and won’t take the time to find out. He is a professional loser and doesn’t deserve to be your broker.
Any good service will set a loss limit on any recommended position and that applies to all stocks exchange traded funds and mutual funds. Before buying any equity you will want to know how much you are risking. The most important rule of all is not to lose money.
There are literally hundreds of stock and mutual fund letters. You want to know their track record – how much annual return has the advisor received for his readers each year over the past few years. Some will quote you wonderful figures, but these may be predicated on following all of his advice all the time. If that is the case you ask how much money is required to buy at least 100 shares of everything he recommend. Don’t let him weasel out of it – make him give you an answer. That amount may be more than you have so you must then pick and choose between his recommendations and you might not pick all the good ones, just all the bad ones.
Take your time. Do you due diligence completely. Finding an advisor who fits your needs is important.
