Back to basics: what kind of investor are you?

Some clients are easier to see and understand. Which one are you? [h/t

We attended a WellsFargo-sponsored Webinar a few days ago and enjoyed it tremendously. The leaders of the meeting were financial advisors who dealt exclusively, apparently, with mutual funds. You all know where we stand on mutual funds.

For newcomers, in a nutshell, our opinion is that you won’t do any better with a mutual fund than individual stocks purchased via discount, internet brokers. Pay yourself that management fee and do your due diligence, reading about individual companies as well as about economic theory and other information that can guide your understanding of markets and stocks.

However, this event, titled Five Tough Clients and How to Spur Them to Action, was a complimentary webcast made by ThinkAdvisor and we found it very instructive. With just a few tweaks, you can use it for and on yourself, rather than for its intended use – a tool for investment advisors.

To begin, think of yourself as your client. This is key. IFO’s entire financial and business life changed when she began to think of herself as a business which hired clients! Now she was no longer a schlub who hoped and prayed for a freelance job, an assignment, from a beneficent editor. She was performing valuable services for them, her clients.

Second tweak, apply all of this advice to researching companies, rather than mutual funds or MF managers. With MFs you are supposed have confidence in your financial advisors, know account fees,  and kinds of funds there are, what your “investment goals are” and so on. Might as well analyze yourself and the companies whose stock you might be interested in buying.

This event was almost an hour, and had great, actionable points, so we’ll probably need two posts to cover the whole thing.

So. To begin. Here are the mindsets of the tough clients the advisors identified. Do you recognize yourself in any of them?

* Fixated on the past. “X happened, so I don’t EVER want to do THAT again!”

* Uncertain, scared. “Oh, gosh. I just don’t know what to do. I see all kinds of things on the Internet, TV, newsletters… market is going up, or down, economy is a mess, or getting better. How can I decide?”

* Resistant to change. “I’m happy where I am. Don’t want to make any changes to my current holdings.”

* Over-reacting. “OMG! The market went down X points! Sell!” Alternatively, of course, “The market is going up! Quick buy everything you can!”

* Attached to cash. “I just feel safer with cash. I don’t want to buy any (more) investment products.”

Okay. See yourself in there? IFO sees herself in a couple of those. Tomorrow, we’ll pass on some coping behaviors which we gleaned from the Webinar.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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