Beware of People Who Offer Investment Advice And Information

When searching for investments, investors are likely to encounter people who genuinely want to help them, as well as financial predators who want nothing more than to help themselves. The challenge is being able to identify which is which. Often, this can be determined by identifying their motivation for helping.

To Help Investors

The investment community is full of people who have tried and failed, or succeeded, at investing. The experience that these investors have to share can, if applied wisely, be invaluable. Their stories of investing trials and triumphs are filled with information that can help investment-seekers make better, more educated, investment decisions.

The people who will be the most helpful are those who take more interest in others’ situation than their own. Questions and responses are directed at finding positive solutions, not dwelling on the negative or delivering harmful information. Additionally, most people who genuinely want to help will recommend dependable investment blogs, forums, and communities to visit for additional help.

To Help Themselves

Regrettably, in the search for more help with their investment strategy, investors will encounter nefarious characters who are motivated by greed, and hope to achieve their success at the expense of others. Most will use any and every opportunity to attack their competitors, as well as anyone who dares to challenge their opinion. This characterizes the online attack on Davenport Laroche by a young, inexperienced fund manager.

The challenge in these instances, is that some people may be selflessly help in the beginning, but then their motivation becomes clear later on. It is important to understand that most financial advisers and fund managers rely heavily on accumulating an ongoing list of potential clients. These are very often collected on their website through free downloads, newsletter subscriptions, and other incentives like their “free” advice.

Nothing is Free

There is an old saying; “nothing in life is free.” Unfortunately, this applies to investing advice too. The cost to investors, when accepting advice, is an investment in trust. They must trust in the information they’ve been given by (in most instances) a complete stranger. If the person sharing the information, insight, or advice shows themselves to be motivated by anything other than empathy and honesty, the value of their communications should be heavily discounted or perhaps even discarded.

Investors Concerned With Traditional Investments’ Performance

An increasing number of investors are growing concerned about the performance of the traditional investments in their portfolio; in particular, their stocks and bonds. Their foremost concerns are that stocks are overvalued and bonds are risky These are two very unappealing scenarios for cautious investors.

Stock Market

In recent years, countless investing surveys have been conducted. Of the people who responded, nearly half believed that the stock market is overvalued. According to the analysts, the current market is the second longest Bull Market of all time. Historically, the S&P 500’s mean P/E ratio is approximately 15. At the moment, it is in the mid-twenties.

Some financial advisers are of the belief that the markets are overdue for a pullback. With that being said, many believe it will emerge as a correction within the existing Bull market, and not surprise the world with another global financial crisis. Many are saying that they expect to see a 5% to 10% pullback in the stock market.


Interest rates and bond prices enjoy an inverse relationship. As interest rates rise, the price of bonds is likely to fall. Conversely, when interest rates fall, the price of bonds trading in the marketplace generally rises. Also, if the cost of living and inflation increase dramatically, and at a faster rate than income investment, investors will see their purchasing power erode and may actually see a negative rate of return.

Aside from interest rate risk, which is the most widely-known of risks in the bond market, reinvestment, default, and liquidity risk should also be closely considered when choosing whether or not to pursue a bond investment.


In recent years, alternative investments have found an important place in a well-balanced investment portfolio. The investment community has taken the opportunity to invest in containers and other hard assets, that emerged relatively unscathed from the last financial crisis. In the absence of viable options from traditional investments, investment-seekers are finding alternative investments to be much more appealing.

Money Managers’ Reviews Can Misinform And Misguide Investors

For most investment-seekers, when choosing investments, risk versus return is the primary concern. Every investor knows what their risk tolerance is. The challenge is identifying investments that satisfy return expectations, while also meeting their threshold for risk. It is a delicate, precarious balance.

In an effort to find investments that meet their criteria for investing, investors will sift through investment testimonials, interviews, and books, to uncover hidden gems of knowledge. These sources of information (often) provide insightful, first-hand accounts that help investment-seekers choose their best options. The only danger to this approach is that some fund and money managers may share bias reviews. These can misinform and misguide the investment community. Without a doubt, this adds to the risks of investing.

Sadly, sometimes financial advisers will try to influence the decision of investors by using defamation, libel, and slander, to make other investments look less appealing than their own. I came across a post earlier from Alexis Assadi that introduced a conspiracy theory – without any substantive proof, and in doing so, he used his influence to intentionally create a sense of doubt in investment-seekers. This is especially troublesome if the adviser has not invested in the opportunity him/herself.

The whole point of penning a review is to share one’s individual experience; it is not a place for fiction or rhetoric. The author’s intention should be to help others make better, more educated decisions, and not intended to be harmful or misleading in any way. If it is not an honest perspective, then in my mind the review is of little to no value whatsoever.

Investors should look for reviews and testimonials from investment advisers who have first-hand experience with the offer they are reviewing. Otherwise, fund and money managers are sharing their personal opinion as fact, and are misleading the investment community. This can create confusion for investors who are trying to balance their risk and reward.