Caveat Emptor

Be careful when seeking advice even from the professionals who are supposed to know more than the ordinary people. Just ask any sales and marketing professionals out there who know the value of repeating the message in their work. They know that with enough time they will eventually crack through their audience’s cortex and implant themselves there for good.

They will repeatedly tell their audience something like you must buy and hold stocks forever, you must remain invested all the time, get into a system and lock-up your money for 15 or 20 years before you could withdraw your capital, bonds are safe, stuff your portfolio with as many mutual funds as possible for the best diversified returns, etc. Claptrap. However, be prepared in glossy, colorful brochures and repeated often enough, the people on the street will believe them.

In the real world, even if some of that stuff might have worked 10 years ago, the financial world has changed and the rules of the game have changed. The harsh reality is that failing to account for where the market today could leave you waiting for decades before you recover your capital. You must always consider where you are and where the market is currently situated. You must make all your investment decisions accordingly.

While having my coffee at Starbucks at a crowded mall, I spotted a group of teenage students most likely from a nearby international school. It was impossible for me to figure out their nationality especially the girls. They mixed with each others freely enjoying their local meals. The older teacher with a big belly was probably an American. The point is it is a big world out there and there are new opportunities waiting to be discovered every day.

Some of my clients, depending on their financial situations will need to make 8%, 10% or 15% compounded returns annually to achieve their long-term financial objectives (from paying college bills to retirement). Sensible asset allocation has evolved beyond domestic stocks, bonds and cash to include offshore diversification across other asset classes. I have grown tired of the demonization of alternative investment funds despite their impressive risk-adjusted performance.

“How do we find really good investment opportunities as well as managers?” You have to think outside of the box a little bit and find your own path – though as you are doing so, stay disciplined and be careful not to get too emotional about the short-term numbers. You also see opportunities could come simply in taking more of an opportunistic and multi-channel approach – something I have always focused on to a great extent in my work.