“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→

“If you begin with a prayer, you can think more clearly and make fewer mistakes,” Sir John Templeton.

“Ok,” you may be saying, “I’ve tried some of these investing principles. I’ve worked hard at them.  But I still struggle. I can’t seem to get ahead.  I make mistakes.  I can’t keep it all going.”

Hello, welcome to the journey.  We all struggle at times.  We get blindsided.  We ride through terrifying meltdowns.  And it causes confusion and sometimes downright panic.  In the midst we grow despondent and want to give up.  But if we give up then we lose.  What do we do? Read More→

“The only way to avoid mistakes is not to invest–which is the biggest mistake of all. . . . The big difference between those who are successful and those who are not is that successful people learn from their mistakes and the mistakes of others.”  Sir John Templeton

Hey, let’s be honest, we all mess up. Then, we look at others who are successful and think, “I’ll never be as successful as they are.  They’re smarter, luckier, better educated (you name it).  They haven’t made the mistakes I’ve made.  I’ll never get ahead.”

And when we screw up investing we can think, “Boy, I’m not going to do that again.  I’m not taking any more chances.  From now on I’m putting my money in safe investments.  Think of what I’d still have if I’d done that this time.”  And we grow so conservative we won’t take any risk so we give ourselves no hope for gain. Read More→

“Don’t panic.  Sometimes . . . you’ll be caught in a market crash.  Don’t rush to sell the next day.” Sir John Templeton

When the market was crashing, in early 2009, I had a client who was extremely nervous.  He called me every couple of weeks to discuss the news as he became more terrified.  One day he dropped into my office unannounced and wanted to meet immediately.

He sat across my desk from me and started in, “I want to liquidate all my investments.  I am getting out of the market.  I think the whole economy is going to collapse.  I’m not sure the U.S. will even survive.”

“What are you going to invest in?” I asked. Read More→

“Aggressively monitor your investments.  Expect and react to change.  Remember, no investment is forever.” Sir John Templeton

A woman, referred to me because of her financial struggles, met with me one afternoon in my office a few years ago.  She was in her early 70’s and years before inherited from her father shares of stock in a small oil industry company.  He had told her, “This is a stock you can just put in a drawer and forget about it.”  At the time, she was working and didn’t need the money so she tucked it away for her retirement.

Years went by and the company was eventually bought by another energy company.  She sent in the shares as requested and received new shares tucking them away.  More years went by and she knew she’d be fine in retirement with her small pension, Social Security and nest egg.

She occasionally read about the company and was pleased with its spectacular growth.  In fact it became one of the superstars in the news.

Then one day she picked up the newspaper and there on the front page was a report on her company.  It had collapsed and was worth virtually nothing.  All of the assets, they supposedly owned, were fraudulent energy contracts.   The top executives were under criminal investigation. Read More→