What do you think of the opinion you should never listen to investment experts; they are likely to be biased ?

Question

Investment advice on various stocks by 'experts' seems to be an attempt to manipulate the stock price on things they hold - therefore we should be very wary of their advice.

Their advise should be based on first principles analysis of business performance and placing this in context of the market the business operates in combined with technical factors that might affect the share price or the small investor eg Currency movements and losses from currency conversion and transaction charges.

What should we take into account when considering their advice?

Answer 1

Hi,

I think that all people do mistakes. Not exception is the market analysts.

I just wonder why they are not trading themselves if they are sure in their own forecast. Trading is much more profitable than forecasting. The conclusion is that they don’t believe in their own forecasts.

I don’t listen to any experts’ forecasts anymore.

If you would like extend your one’s knowledge about successful trading then read those books: Trading Chaos – Applying Expert Techniques to Maximize Your Profit by Bill M. Williams;
New Trading Dimensions by Bill M. Williams
Trading Chaos II by Bill Williams – Maximize Profits with Proven Technical Techniques by Justin Gregory-Williams and Bill M. Williams

It is really worth to allot some time for reading it. It would be very useful as for traders as for investors.

Good luck!

Answer 2

If you are talking about a local adviser giving you advice than take into account how much the adviser is getting paid. Ask him, "How do you make money on this and if you don't mind me asking how much?" See what happens. If they will not tell you, walk.

Annuity commissions are usually anywhere from 1-10% depending on the company, duration of surrender period and the type of contract, like indexed annuities which are 6-10% commission. No wonder why all the so called planners are putting clients in these nasty vehicles.

Retail Mutual funds like A shares usually have a pay out of around 1.5 to 2 % commission. Wrap account or fee only services will Charge you .75 to 1.5% annually on assets under management depending on how much you are investing.

Invest your own - Free.

Advice...Always taken in context of the adviser, Jim Cramer...Great actor who actually gets the market and makes stocks fun to pay attention to. Stocks bought on his advice 0.

Remember you are in for the long haul. Get a good honest adviser to help out and get on the same page with them. Ask the right questions and use their fiduciary responsibilities to help you make money.

You will make more money over a 10 year period with a professional that is a passive investor with low fees and not trying to time the market. See Harry Markowitz philosophy, The efficient frontier.

Good Luck.

Answer 3

they wont be able to manipulate the stock price unless its some little penny stock, then you shouldnt be buying it anyway

it is odd how people here say to not use a financial planner, to do it yourself, i don't get that, if you dont know what you are doing with a car do you fix it yourself or have a pro do it? your investments are more important than a car so have a pro help you out

just ask some relatives and friends for a good trustworthy planner

if you are talking about online investment experts,then yes, 85% of them are spammers or scammers, or just give horrible advice, like here it seems the advice for beginning investors is forex and invest your own stocks, terrible advice for a beginner

EDIT: you are already getting that advice i warned about, a new investor (i think) and he is told not to get advice, but invest in croatia, yes,put a new guy in a single stock in a foriegn country, i wish i could roll my eyes here

Answer 4

Well, of course, everyone has a tendency to be biased toward their own interests. However, there is such a thing as honest investment experts. They actually might just tell you the truth.

The best thing to focus on is how the advisor is compensated. If he benefits from the sale of the investment (works on commission, for example), you're much less certain about their incentives. If their incentives line up with yours, you can be more certain about their motives.

Regardless, though, look at their record. If they have good references from happy clients, that's usually a good sign.

Answer 5

better not to use advice from so called "experts" . go invest in some new markets.. like Croatia... Fe INA , 1 day profit was 40% after IPO. Maistra was yearly 60%, Pliva & much more

Answer 6

You know I'm loosing my shirt on XYZ so you know what, I'll tell millions of people to buy XYZ so I can bail! It's just too easy for them to pump and dump a stock or even a sector.

Answer 7

investment advisors tend to be biased towards the schemes that give the greatest commissions