In trying times, investors seek the help of secure investment services. Many invested in hedge funds prior to the 2008 market collapse. They watched their hard earned lifetime assets evaporate virtually overnight. People who sought the services of investment services, such as that of Bernie Madoff, believed what they were told and believed that they could simply hand over their affairs to someone else. When the Madoff pyramid scheme melted down, many with large fortunes found themselves relying on their social security and the sale of their homes. One might ask if secure investment services are possible to find. Certainly it is apparent that no matter who is managing your money you need to pay attention, do a little of your own fundamental analysis, ask questions, and diversify among even what appear to be secure investment services.
What Could and Did Go Wrong?
A lot of the business of investing has to do with having realistic expectations. When we read news reports of successful investors and successful companies it can be misleading. Everything may seem clear in hindsight, the choices an investor made, the timing of his buying and selling. However, the business of investing is not always clear. Fundamental analysis can be difficult. Getting a clear idea of intrinsic stock value and the margin of safety of a company takes times and study. Understanding the intrinsic value of overseas investments, in rapidly growing markets, can even more difficult. However, staying engaged with your investments, diversifying among investment vehicles, and diversifying among conservative and aggressive investments is commonly the safest and most profitable route over the long term. What went wrong for many investors in the run up to 2008 was that they demanded high returns, did not really pay attention, and did not get out of the market when the market no longer made sense. When you do not understand how XYZ Corp. makes money you should probably not be investing in them. When the stock value of a Microsoft, Coca Cola or Apple is based on recent rapid growth it is often time to take more than just a little off the table before a bad quarter drives prices down and keeps them there. In the end putting all of your trust in someone to manage your assets is a recipe for problems.
How to Proceed Today
What constitutes sound investment advice today? Can you find secure investment services in the era of the fiscal cliff? Basic investment advice is worthwhile no matter what the era, the market, or the market tips of the day. Pay off your credit card debt. Buy your own home and enjoy the tax free interest write off. Use common sense in making any and all discretionary purchases. Learn the fundamentals of investing and insist that even the most secure investment services that you might employ follow these rules and keep you abreast of what they are doing with your money, why they are doing it, and how they are doing it. Expect to get a better return on investment including fees and commissions than if you had your money in the bank. And, expect that your money will be as secure as if you had it in the bank. Expect to beat the rate of inflation and expect that you will have no unwelcome surprises. That is what to expect when you deal with secure investment services.