Topic: How To Invest

What is Pat’s commentary for the week of January 16, 2018

Article Excerpt

Dear Inner Circle member, We’ve often pointed out that hidden conflicts of interest are the single greatest risk you face as an investor. That’s because you’ll find conflicts of interest all over the place, but especially in the financial industry. The potential cost of any one conflict may be modest, but the potential cumulative damage is huge. The Labor Department of former U.S. President Barack Obama deserves credit for targeting this situation with its plan to require investment advisors (stock brokers and securities salespeople) to adopt a “fiduciary” standard in their advice to clients, at least in respect to retirement-plan investments. Under this standard, the advisor is supposed to sell the client what’s best for the client. That’s a big improvement over the current “suitability” standard, under which the advisor merely needs to sell the client investments that are suitable for the client. The problem is that many suitable investments are OK at best for the client, although they’re great for the advisor…