Topic: How To Invest

What is Pat’s commentary for the week of February 24, 2015

Article Excerpt

Let me remind you of a couple of our most valuable Successful Investor rules: First, a healthy sense of skepticism is your most valuable analytical tool. Second, the greatest risk you face as an investor to fall victim to a conflict of interest. When I raise these two intertwined ideas, friends of mine who work as brokers sometimes say, “You must have an awful opinion of brokers, judging by the terrible things you say about us.” That’s a misconception. Brokers are human. Some are people of high integrity; others, not quite so much. But the core of the problem is that the financial industry offers its salespeople incentives to give clients bad advice. A broker can sell his or her clients a wide variety of products and services that will bring the broker a wide range of fees and commissions, from high to low. As a general rule, the more income a broker earns from selling a particular investment, the weaker the match between the…