Yes, it's true. You no longer have to doubt that the investment market is after you, and will do whatever it takes to destroy your portfolio and even your very soul. It knows when you are in the market, rather like when you try to cross an alligator infested swamp. by the time you dip your toe in the water, they are swimming in your direction, and your welfare is not on the top of their list of priorities.
I am sure many of you are having second thoughts about your investments. Some may even ask, "Should I get out of the stock market?" By the time you ask that you are too late. The damage is done.
Professionals Vs Amateurs
The market is a place full of professionals who take money away from amateur investors. There are your brokers, who take a commission no matter what you do, and there are the traders who manage your mutual funds and lose money faster than they can deposit their fund management fees. Then there are the short-selling traders who push the value of your stocks down the crapper, while they rake in the profits. Professional traders know they can make money out of your investments three times faster on the down side by pushing your stocks and funds into oblivion.
Training Programs, Newsletters and Bears... Oh My!
And wait, there's more. You can sign up for any number of training courses for investors who want to get fleeced even faster. They have programs which cost thousands of dollars, but which promise ridiculous results. You would think you could walk on water after taking one of these courses, and become immune to the alligators as you skip past them. There are many newsletters with stock tips and investment advice, both free and expensive. And how about fancy software programs, which analyze data by the bucketload, and give you detailed instructions on what to buy and what to sell to make you rich. By the time you realize that none of these work, you have lost an arm and a leg.
While all this is happening, and you are up to your neck in alligators, your tour guide or your financial advisor is encouraging you to dollar cost average down, which is chasing good money after lost. It is like sending in your other kid to rescue the baby that just got eaten by the alligators. When you point out that you did everything they told you and you lost big time, they suggest you might have picked the wrong approach, and that your risk tolerance level is lower than you thought it was. They are trying to bounce the blame back on you!
One thing I learned from a former (reformed) financial advisor is that their certification comes from a consortium owned by the banks. They train advisors to tell their victims, I mean customers, that "now is always a good time to invest". Their job is to keep finding more retail investors (amateur investors) for the banks. The more retail investors, the more fees the banks can make. Hopefully, most investors just leave their money there, until the bank can whittle it down to nothing.
Would you trust a financial advisor that has not made any income from the market themselves, and are thus forced to work as a tour guide to drag more fools into the swamp? Some of them have the gaul to call themselves "Certified" Financial Advisors. Ask to see their portfolio and have them show how they do, if you can...
Risk Tolerance Levels
Does your asset allocation align with your risk tolerance level and investment time horizon? Does the market care? It is clear the investment firms don't care about your risk tolerance level, compared to their commissions and fees. In fact, bend over, because they are going to have a proctologist stick your risk tolerance level where the sun don't shine by time they are through with you. If you buy or sell, there is a fee. If you hold for too long, you are considered inactive, and you get an inactive account fee. If you have had enough and want to get your few remaining assets out of their clutches their is an account closing fee. You can't win!
Risk tolerance is a label financial advisors use, because Gullible Level would make it too obvious that you are being set up. The market is out to get you, in so many ways. Your so-called advisor is not your friend, just like the salesman at the car dealership is not trying to get you the best deal. Hint: when they go into the back room to "talk to their manager", there is no one there.
The best thing I can offer you is to take your own control of your finances. Don't trust your guide. Don't go into the swamp unless you live there, because you will get eaten alive!