Masonry Magazine February 2003 Page. 43
Make sure that all investing-related costs charged by your investment advisors are strictly fee-based, not commission-based. The commission-based advisor will make money by simply taking you into and out of any investment regardless of how the investment performs for you. These "advisors" usually push a particular product that brings them the highest commissions. Sadly, whether the investment performs well for you or not is inconsequential to them. In fact, if the investment does not perform well, these advisors may actually be happier than if it had. Why? Because they get to move your money again into something else... bang, another commission earned!
Fee-based advisors, on the other hand, will charge you in one of two ways: either a one-time fee for planning or an ongoing fee for assets under management. As your portfolio grows, their fees grow. If your portfolio goes down in value, their income goes down accordingly. Which type of advisor do you think would work in your best interest?
Stick with a conservative, long-term, portfolio-management approach. Forget about market timing and believing that your wealth-manager can pick market tops and bottoms. It has been proven time and again that this simply cannot be done over the long-term. If you are diversified properly, and rebalance periodically, you will never have to worry about "catching" tops and bottoms. Your investment capital will always be in the proper place: poised to catch rallies automatically. You will also avoid all those nasty transaction fees incurred when you are "trading" versus investing.
Your portfolio should be as unique as you are. Everyone has different standards of living and lifestyles to maintain. And all investors have different goals, as well. Your portfolio should be tailored to accomplish your financial goals, taking into account your age, income needs, portfolio size, life situation, and future needs. Also, your financial plan must be adaptable to change should your life-situation change.
You're in the driver's seat. Your wealth-manager can put you in the winner's circle if, at the very least, he or she uses the basic guidelines you learned here to plot your course. Under this system, you can trust that even a few bad market years should not seriously impact what you have accumulated nor should your present lifestyle or plans be threatened. Remember, we've had these markets before and this system has brought prosperity to those who stood by it. With this system, you also get a bonus side-benefit: when you read your account statements, you'll feel peace of mind. After all, isn't that really what your investments are supposed to bring you?
Carl Sanger is the owner of Serenity Wealth Management, LLC in New York. Sanger is a Registered Investment Advisor and has been managing investment-capital for 10 years. He can be reached at (866) 958-4626 or by e-mail at carlsanger@carisanger.com.
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