“There’s no free lunch.” Anonymous

In the last month, I’ve had two clients call asking about an investment that’s being pushed big-time right now. They had each attended separate dinners at a high-end restaurant to hear a presentation about indexed fixed annuities.

The presenter told them, “The insurance company that packages this guarantees you can’t lose money. Yet the investment goes up in line with the stock market. It’s the perfect investment.”

So both clients called and asked me about it. One said, “I couldn’t figure out why you hadn’t shown it to me if it was so good.”

I responded, “I don’t believe it is an appropriate investment.” Well, that’s not really what I said. But for compliance reasons we’ll leave it at that. Read More→

“Everything is in a constant state of change, and the wise investor recognizes that success is a process of continually seeking answers to new questions.” Sir John Templeton

I watch people make the same mistakes in investing over and over again. And it’s not limited to amateurs. They panic and sell out when it is low. They chase the new hot investment trend just as it’s peaking.

Look at some of the huge public and private pension plans. Many are seriously in trouble because of their losses. They can’t even come close to paying their obligations.

At the height of the tech boom in the late 1990s article after article advised, “You can’t lose money in tech stocks.” Record amounts of new money poured into tech stocks in early 2000 just as it peaked in March. Then they broke and cascaded down for the next three years. Many people lost everything. They had invested in companies that had no profit and in some cases not even a product. Read More→