You may have a financial advisor…….but why?

Those who have an advisor would most likely respond that he/she helps them with investment decisions. The majority of stockbrokers and financial advisors would agree with that role.

But, today you can buy stocks for less than $10 a trade, and most mutual funds cost nothing to buy or sell. The average mutual fund will incur expenses of 1.3 percent per year, according to Morningstar (a mutual fund advisory service), and index funds cost 0.2 percent per year. If you are just buying mutual funds do you really need an advisor? Probably not, a service such as Morningstar offers a wealth of information and the annual fee is $199. Morningstar’s service is like getting an investment advisor, without the costly fees. You can also sign-up for their free service, which excludes the premium options.

So you really need a financial advisor to help you build a stock portfolio. These portfolios are created from the brokerage firms recommended list and my experience is that most brokerage firms wait until a stock has advanced significantly before being given a buy recommendation.


They rarely make recommendations when there is maximum financial opportunity (capitulation in the above chart). Additionally, there are few sell recommendations put out by brokerage houses, perhaps because of investment banking relationships. Why risk a banking relationship with a sell recommendation.


I entered the brokerage business in 1976 at Dean Witter Reynolds some 40 years ago and things have changed. However, at the time I was given a recommended list and a telephone and told to go after it. I didn’t feel comfortable making recommendations off a list. What was I bringing to the process? I needed to bring something of value to the table. I took a year long class in technical analysis and I’ve been using the tools of the trade every since. You can explore my site to learn some of the tools.


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You really need an advisor who brings more to the table. Someone who has a keen interest in your financial well being and with whom you feel comfortable. It’s hard to put a value on the peace of mind you get from knowing that you and your spouse have a dedicated professional ready to help during life’s most difficult times. When the market crashes or your spouse dies having a strong relationship with an advisor can translate into returns.

Your advisor should be giving you guidance about your mortgage, employee benefits, credit, debt, taxes, insurance and estate planning. Your advisor should handle all of your investment record-keeping and tax-reporting chores so you don’t have to. If your advisor merely helps you pick stocks, bonds or funds you may need to replace your advisor.

Should that replacement be you?

Roller Coaster

You may respond that you don’t have the time or expertise to accomplish such a task. The truth is that it takes so little time to design, implement, and manage a portfolio, that the amount you save by doing it yourself can make it worth you while. Sure, you have to put in some time up front educating yourself, and you have to design and implement a portfolio, but after that its pretty much on autopilot. By tracking your investments and following the markets you’ll be amazed at how quickly you can get a feel for the markets. You’ll begin to recognize the times when you need to become more conservative and/or more aggressive. You just need to spend a few minutes a day and it really can be fun.

You should be putting more time into planning your retirement than planning your vacation! You just need to be open to the idea, you can make it happen, though not overnight.

I’m here to help you with all of these tasks and I’ll walk you through each step from mutual fund investing to individual stock portfolios. It won’t cost you a thing, just your willingness to participate.

This should be a second job! Like it or not even if you hire someone to help you with it. You need to know how to assess the help that you are getting.

Update on Gold: (Using the Market Vectors Gold Miners ETF) Click Here for previous post


We’ve had 3 days of increasing volume and very good price action since my recommendation. This action is extremely important since we have put in a new short term high (above the April high). There is still work to do and that is moving above the March high of $28.  Once clearly above the March high we could really see some price appreciation. We could easily see a retreat back to the $24 – $25 area and that would be okay. Anything below that would be disappointing and would raise some concerns.

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