The Smart Money

Fundamentals of Market Investing by Adam J. McKee

Most of the people that you encounter that are called “financial advisors” are in truth salespeople.  We all know how salespeople operate (if you do not, you need to learn).  They look good, and they talk smooth.  They have a script down pat that uses all of the rights words and pushes all the right psychological buttons to convince you they are a boy scout that is only concerned with making you rich.

On Wall Street, the phrase “smart money” is used to refer to the elite who really know what is happening, control fabulous sums of money, and who can beat the market on a regular basis.  Think about your hometown financial advisor.  If he were great at beating the market, would he be working as a financial advisor?  If you can really beat the market consistently, you should be running a hedge fund and becoming very, very wealthy.

Also, note that the status quo in the United States today is not becoming wealthy.  This fact seems to suggest that following the conventional wisdom is a recipe for financial woes, not building wealth.  If you are doing what your family, friends, and neighbors do, then you will not likely build substantial wealth over your working life.  Most of the conventional wisdom and “rules of thumb” you encounter about finance are just plain wrong.  My advice is to read widely and listen carefully to those who have amassed substantial wealth, especially those that have done so in the markets in which you can and will participate.

Why would you ignore the advice of John Bogle (which you can obtain for the cost of a book) and pay a financial advisor who is still selling financial instruments for a living?  I do not mean to disparage the profession of financial advising, but placing your future in the hands of someone else and not studying the matter yourself is reckless to my way of thinking. By the time you know enough to make an intelligent and informed decision as to who is a quality financial advisor, you know enough to do it yourself.


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