The Sarcasm Report v.70

Is Your Broker Looking Out for Your Best Interest?

Ask your broker what he plans to do if the market suddenly crashes, or if it begins to significantly increase. He should have an answer readily available.

It would be my hope that my online broker does absolutely nothing. I probably won't be that lucky though. They'll no doubt send me an email telling me about upcoming free seminars to theoretically enhance my trading profits.

Is he only using index funds? While index funds are very inexpensive, in the current market environment, they are not your best investment option.

One way to boost returns in a flat market is to increase the fees spent on stock market funds. No doubt about it.

The stock market is currently "range bound," meaning that it will experience volatility within a certain range, up and down, over the next few years (similar to the 1970s).

We can simply take the stock market's current trend and extrapolate it forward? For the first time in recorded history, we now know exactly what the market will be doing over the next few years? Genius!

While indexing will not produce outsized returns, the right active manager will take advantage of that volatility and actually make your account grow.

If hindsight shows that the market was truly range bound for several years, then hindsight will also show that for every dollar that the "right" active manager makes there will be a dollar that the "wrong" active manager loses.

Here's some free advice. Invest a small portion of your nest egg in rabbits' feet and four-leaf clovers before trying to pick the "right" active manager. I doubt it would help but it certainly couldn't hurt!