Learn to Invest Money: Three Tips for Finding a Superior Financial Consultant
Have you ever been frustrated by the seemingly endless supply of cookie cutter financial consultants that work for the biggest investment firms on Wall Street? Ever wonder how to really know if Jane, who was assigned to be your new financial consultant, is any better than Peter, your ex-financial consultant that just left your firm? I’ll give you three easy tips to find out how. Ask your financial consultant what are his or her: (1) Favorite global markets;
(2) Favorite market sectors; and
(3) Favorite stocks. Global Markets Let me tell you why it is imperative that your financial consultant can answer the above three questions . Global markets vary quite considerably. One year when the American S&P 500 is down 20%, the Japanese Nikkei 225 index may be up 40% and the Australian ASX 200 may be up 15%. So while the majority of clients at a firm may have lost money in their stock portfolio because their financial consultants all had them invested primarily in the U.S., a financial consultant with a global perspective can actually earn you positive returns. Specific Market Sectors Specific sectors exist at different points in the economic cycle that are poised for huge upswings. Over the past couple of years it was oil (almost any oil company in any country, but specifically Russian oil companies) and metals, specifically gold and silver. What is looming on the horizon as the next huge thing that is bound to make many smart investors millionaires over the next five to ten years is nanotechnology and renewable clean energy. Diversification has always been the lazy financial consultant’s method of investing your money. Let’s put some of your money in pharmaceuticals, transportation, utilities, oil, biotechs, manufacturing, telecommunications, and agriculture because at least some of those industries are bound to do well, right? Wrong. Ever wonder why you never earn more than 6%-15% returns a year. Dumb diversification is your answer. There is a smart way to diversify and a dumb way to diversify. Most financial consultants employed by huge investment firms overwhelmingly use the dumb method of diversification. I call it not only dumb, but also lazy. The smart financial consultant will buy you the best stocks within the top growth sectors, not buy you many different stocks across eight different sectors. The financial consultant that employs the dumb diversification strategy only does so because he or she is too lazy to research and discover what will be the top performing industries. Specific Stocks When you ask your financial consultants what specific stocks he or she likes, this is the last part of the drilling down procedure. If he or she can identify the largest growth industries within the largest growth regions of the world, but buys you the five worst stocks in each of those industries, then it makes everything irrelevant. The best financial consultants in the world understand how politics, corporate management, industry growth cycles, elasticity of demand, and product potential all factor into identifying the best potential stock prospects for you. And they’ll be able to explain with clarity the best stock opportunities in the world. This is why every financial consultant should be able to explain his or her favorite stock picks to you. In summary, every good financial consultant should be able to answer the above three questions without hesitation, even if they employ outside money managers to invest your money. Why? Because even if your financial consultant is hiring someone else to manage your money, the best money managers can only be identified by asking the same above questions, not just by looking at numbers, statistics, standard deviations, and performance. This means that in order for your financial consultant to identify the best money managers, he or she must necessarily discuss the above three questions with them. If he or she did, then he or she will also be able to answer the above questions for you. The only way your financial consultant will not be able to answer the above questions is if her or she is selecting money managers strictly based on statistics only. And as you now know, statistics is not going to maximize the returns of your stock portfolio. But knowledge will. © 2006 SmartKnowledgeU™ This article may be freely reprinted on another website as long as it is not modified, changed, or altered in any way and as long as the below author byline is included along with the active hyperlink exactly as is. J.S. Kim is the Managing Director of SmartKnowledgeU™. He has over thirteen years of experience in finance and financial services, and has earned a BA in Neurobiology from the University of Pennsylvania, a Master in Public Affairs from the University of Texas at Austin, and an MBA with a concentration in finance from the McCombs Business School, University of Texas at Austin. He is the inventor of the revolutionary MoneyPing™ investment strategies, a novel approach to learn how to build wealth, not just dreams. To learn more about how to hedge your assets against unstable global markets and how to significantly beat the market indices, click the following link, Learn to Invest Money and Achieve Financial Freedom |
Other Trading Tips Articles
High Return Investments – Why the Majority of Traders Don't Win! Lets face it, we all want high return investments but the majority of investors achieve mediocre returns and this is they don’t understand two important facts.If they did, they could be on their way to far higher returns And a true high yield investment.Let’s look at the above in more detail and two keys to making huge returns from ...Currency Trading Psychology - Controlling your Emotions The fact is, the majority of traders lose because they cannot control their emotions - and their emotions cause them to make irrational trades and lose.Trading psychology is one of the keys to investment success, but its impact is not understood by many investors, who simply think they need a good trading method, but this is only part of ...The Market Holy Grail: Fact or Fiction? IntroductionThe Holy Grail is quite possibly the most famous piece of Christian mythology. Almost every archaeologist, historian, Christian and capitalist would love to find it, and many dedicate their lives towards its pursuit. It is said that those who drink from The Grail will be blessed with eternal life, whether that is spirit ...Take Home The Money For short term trading, not much beats momentum, where a stock is on fire and we simply hop on for a short ride and jump back off. This is the life blood of short term holds whether it be a pre-earnings run, a split run, or a news driven pure momentum play. One of the biggest faults that can be made in this game is hanging on too long.One ...Part II of Day Traders and Swing Traders and Options? Maybe! Before every protective put trade it is possible to calculate your anticipated maximum loss. Use the formula: (stock price minus strike price) plus option price. For example, suppose you will pay $30.00 for your stock, and you want no more than a $3.50 loss on the position. Then you would choose the $27.50 strike put which ...Who Wants To Lose All Their Money In the Stock Market Everyone dreams about making a lot of money in the stock market, but the reality is that a most just lose money. While they were a few that have made money on well-timed investments, the majority of people who play around in the stock market to not make a lot of money.If stockmarket investing is something you’d like to get into, you need ...Management Accounts and Small Business Many small and medium sized businesses, as well as some large companies, have little idea of the financial state of the organisation.It some instances a daily, or even a less frequent check on the bank balance, purports to represent the financial control exercised by the business owner. Other performance indicators may also be used, but ...Fantasy Basketball 101 Fantasy basketball gives fans a chance to experience what it is like to manage their own franchise. If you’re a typical ‘back-seat driver’ during the regular basketball season, there is no better chance to enforce your own decisions when comes to trading and drafting than to create your own fantasy basketball team.The first step you will ...Full Service Commodity Brokers Full-service commodity brokers offer a wide selection of investment products such as agricultural commodities, currencies, stock indices, and insurance. They specialize in risk management in the agricultural industry. They provide comprehensive and personal service for an individual trader.Full-service commodity brokers understand the cli ...Bextra and Vioxx -- Tips for Arthritis Relief Without Them The recent withdrawal of Vioxx and Bextra from the marketplace, due to concerns over unwanted side effects, has many arthritis sufferers concerned. These drugs, which belong to a powerful class of non-steroidal anti-inflammatory drugs known as COX-2 inhibitors, are quite effective at fighting the pain and inflammation of arthritis. Unfortunat ...Sports Arbitrage Trading Review If you are reading this you must be interested in how people are using sports arbitrage trading to earn and extra income from home. Well as with any home business of any type its not going to be easy, and it will take a little work and effort on your part.First let me explain to you how arbitrage trading works.First y ...BACK-to-SCHOOL - 10 TIPS for Trade Shows A NEW YEAR IS BEGINNING NOW - THE SCHOOL YEAR.Whether you have children attending for the first time or finishing university, it Is always hectic to get into the back-to-school routine. And, if you do not have school in your family, there might be your own remembrance of the excitement of starting afresh and learning something new. ...Mutual Funds Tip for More Profits The mutual fund industry has staked its claim to the confidence of investors by establishing a tradition of plain dealing, honest accounting and overall trustworthiness. If there were sharks on Wall Street, they didn’t swim in the mutual fund sea.That image changed early September, 2003 when the attorney general of New York State announce ...Can Car Insurance Be Affected By Your Bad Credit History? If you have bad credit you can be denied car insurance! The protections afforded to the consumer since the Depression of 1929 no longer exist. The Financial Laws passed through Congress in 1992 allowed banks, insurance companies, investment firms to handle banking, insurance and investment operations. Laws passed after 1929 had prevented banks f ...Pairs Trading: What Is That? Quite a few firms are getting involved with "pairs trading" and we thought we just might take a moment to explain what the term means. Pairs trading means that you simultaneously go long one stock in a sector and you go short another one. On the surface, you might be thinking, "why would anyone do that?" Well, for a couple reasons.Fir ...How You Can stop Bad Breath Bad BreathBad Breath is a very unpleasant cause of embarrassment. Medically known as Halitosis it is a very common problem seen in many people. Most of the people with bad breath are unaware of this problem and they tend to be told by their friends/family members or acquaintances.Causes:There are many causes of bad breath li ...Holy Grail Investments Every year I go to the Money Show in Orlando, Florida. Thousands attend. It is mostly an older crowd with the youngsters about 40 years of age. I have been saying for years that until you have lost enough money trying to make a fortune you will not become serious about investing. The under 40’s are shooting for the moon and it has finally dawned ...Choosing A Forex Trading System - Part 1 There are many different kind kinds of Forex trading systems.Of course, the most important Forex trading system is the one that is right for you.As you search the web for Forex trading systems suitable to you there will be many seemingly appealing offers many promising to be so much better than the rest.It can be difficult t ...Building Your Ideal Practice: What's in Your Work Model? The credit card commercial asks:"What's in your wallet?"The message is that they want to save you from the ravages of high interest from other credit card companies.When I ask:"What's in your work model?"I want to save you from the ravages of having a job and living paycheck to paycheck.Work once - ge ...Tips to Transform Your Scrabble Game Alright, so your mother-in-law, a PhD in English Literature, has challenged you, a lowly salesclerk at the local bookstore, to a “friendly” game of Scrabble. Sound like a hopeless case? Certainly not! More than just a rivalry of vocabularies, Scrabble is a game of strategy. Equipped with the right tricks, even a child could give your mother-in-l ...Top 7 Things They Do Not Teach You in MBA School Often when I give speeches at MBA schools I am flabbergasted by some of the questions that I get from the students. It is often as if the students have no concept of reality and that is very scary for a potential employer. It is even more scary to think that they are being taught by a professor who has never actually been in business but only ...Online Stock Trading Ask the wealthiest of Americans what their secrets are to financial success, and they will most likely say that one of them is stock trading.The 1980’s were particularly helpful to big-time stock investors – those who could afford to invest thousands upon thousands of dollars were able to double, even triple their incomes. Luckily, for th ...Online Commodity Brokers Recent technological advances have enabled investors to execute trade and place their orders through computers using the Internet. This has revolutionized the way shares and securities are traded. To make use of the current trend, organizations have extended the range of financial services provided. Online commodity brokers are involved in trans ...Sell in May, Go Away and Don't Come Back Till St Leger Day This is an old adage that is often quoted within the world of the Stockmarket. It reflects the fact that the market tends to be quieter during the summer months. The ‘St Leger day’ saying advises investors not to have their money invested in the quieter months between May and early September.But does it hold true for every year?Tak ...Hot Commodities – Buy Copper For Huge Long Term Gains! Buying copper as long term investment is one of the best ways of taking advantage of global economic growth.Forget about the situation in individual countries, global demand is strong and this commodity is “hot” and long term gains are expected of 100% or more!Triple digit gains per annum100% annual gains are a strong possib ...How Trading Works & Common Terms How a system that can facilitate one billion shares trading in a single day works is a mystery to me, so I thought I’d do a little digging and see if I could come up with the general process on how stock trading works. Here is what I found.The purpose of a stock market is to facilitate the exchange of securities between buyers and seller ...A Short Term Tactic for Capturing More Profits It is called "dividend capture". This strategy is executed when a trader buys a stock just before the ex-dividend date, so that he or she will be a shareholder of record on the record date, and will receive the dividend. Because the stock falls by the amount of the dividend on the ex-dividend date, the strategy calls for the trader to then wait ...The Gold ETF: Maybe The Best Way To Own Gold Let's start off with the assumption that you want to own gold. You want to own gold as a hedge against inflation. You want to own gold as a hedge against a declining currency, like the U.S. dollar. And you want to own gold -- well, for the same reason you would make any investment -- because the price is likely to go a lot higher in coming years ...How Sports Arbitrage Trading Can Make You Money So you are looking for a way to make money. Sports arbitrage trading is one of the easiest ways one can earn unlimited amounts of money working any time of the day from anywhere in the world. Why is it so easy? Simple with arbitrage trading you CANNOT lose. Imagine betting $200 on something you know you are guaranteed to win ...
|
