If Planning is the foundation for achieving your financial goals, then Knowledge is the cement that holds the foundation together.
Unfortunately, to be successful, most investors will need to “unlearn” most of what they believe to be true about investing. Our library is filled with resources that repudiate the investment myths perpetrated by Wall Street and its agents in the media.
Some of the more common myths include:
Myth: All “advisors” are created equal.
Fact: The vast majority of financial advisors have no legal obligation to put your interests ahead of their own. This means they will often sell you products that are most profitable for them, but of questionable value to you.
Only a fiduciary advisor is legally, morally and ethically bound to putting your interests first at all times.
Myth: How an “advisor” is paid is irrelevant.
Fact: An advisor’s method of compensation can significantly influence the quality of the advice you receive. Fee-Based and Commission-Based advisors have nearly unavoidable conflicts-of-interest with their clients, because their first loyalty is to the products they sell and the firms they represent. It is no secret on Wall Street that the highest commissions are paid on the products that are hardest to sell. As a result, Fee-Based and Commission-Based advisors get paid best for selling what their customers want and need least.
In stark contrast, Fee-Only advisors are paid directly by – and only by – their clients. Their advice is independent of their compensation and therefore their loyalty is to the client first.
Myth: Investment success equals “beating the market.”
Fact: Attempting to “beat the market” is speculating, not investing. Speculation inappropriately focuses on short-term results and introduces unnecessary levels of risk and cost.
Investing has a long term perspective and focuses on striking an appropriate balance between risk, reward, and your most important financial goals.