Hammer to my own head

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ytrewq's picture
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I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)Client wants to move whole portfolio of various mutual funds to cash because market is too risky.Next he wants to know what I think of $50,000 each in gold and silver.I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).At first he laughs at me.  When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.The bottom is near and if not we will all be replaced by guys that fish.

Sportsfreakbob's picture
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Joined: 2008-08-24

Actually, if the bottom is not near, we will all BE guys that fish.

troll's picture
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ytrewq wrote:I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)Client wants to move whole portfolio of various mutual funds to cash because market is too risky.Next he wants to know what I think of $50,000 each in gold and silver.I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).At first he laughs at me.  When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.The bottom is near and if not we will all be replaced by guys that fish.
 
Explain to him that he is selling low.  If he does not bite, do your job.  Liquidate the MF's, and buy options on silver and gold, allowing him to use leverage, participate in the upside, limiting downside risk, and you will still have money to work with if his fishing buddy is wrong.  Everybody wins.

Anonymous's picture
Anonymous

ytrewq wrote: I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)Client wants to move whole portfolio of various mutual funds to cash because market is too risky.Next he wants to know what I think of $50,000 each in gold and silver.I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).At first he laughs at me. When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.The bottom is near and if not we will all be replaced by guys that fish.

Sell him a variable annuity.

troll's picture
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SonnyClips wrote: ytrewq wrote: I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)Client wants to move whole portfolio of various mutual funds to cash because market is too risky.Next he wants to know what I think of $50,000 each in gold and silver.I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).At first he laughs at me. When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.The bottom is near and if not we will all be replaced by guys that fish. Sell him a variable annuity.
 
You're a one trick pony Bobby.

deekay's picture
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Actually, he's got a point, primo.  A VA may fit quite nicely for this guy.

troll's picture
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deekay wrote:Actually, he's got a point, primo.  A VA may fit quite nicely for this guy.
 
For someone who wants to cut and run as soon as the market moves against him?  I'm sure the arbitration over the surrender fee will be pleasant.

tryintomakeit's picture
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Gold is going to be very hot in the next year or two (especially with inflation being understated and ESPECIALLY if we dont hit a bottom).  Silver could def. but def. not as much as gold.  Materials and metals are one way to take advantage of a PORTION of the clients' assets, and a portion across diff. high quality fixed income (Munis with solid local footing like NYC or LA, not Modesto, California), high quality corp. and some Treasuries.  I say diversification is very key in these times.  I dont aim to make clients rich during these times, I go to cap. preservation.  Buy n Hold just doesnt cut it nowadays (look at Russia's index when they invaded Georgia, very steep declines).  Add the last 3 days of the Dow, point proven.Just be strong and be smart.  Look at where you going before you jump in is my only caveat.  Opportunity is still out there.

deekay's picture
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Primo wrote:deekay wrote:Actually, he's got a point, primo.  A VA may fit quite nicely for this guy.
 
For someone who wants to cut and run as soon as the market moves against him?  I'm sure the arbitration over the surrender fee will be pleasant.
 
I said MAY.  I have no clue for sure.  If a VA will keep him invested vs. trying to bail out, it MAY be appropriate.

troll's picture
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ok

Ron 14's picture
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Tell him to stay put, in your recommendations, or find another advisor. What would your Doctor do if you said, "Well how about some of medicine A and a bit of medicine B?" Like Nick Murray says, if you begin getting told what to do by your clients you will soon know how it feels to be pecked to death by ducks.

ytrewq's picture
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Tryintomakeit I appreciate the suggestions however October will be my 19th year as an advisor and I would say that the last 3 days only prove that we are past 2 days and not quite yet at 4 days.  No disrespect but there is no proving anything in what we do.As I am sure all of you know, once you have these conversations with a client you have a ways to go before you can even discuss serious investment advice.You first have to explain that although you know it is common knowledge, the moon is not really made of cheese.  Selling at the top and then rebuying at the bottom would assure great wealth but the time machine is in the shop for repairs.  I was really hoping others would post the crazy stuff that they are hearing so I could be smug and say "well atleast I am only dealing with 3 guys in a boat, other advisors have it worse."

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I have clients who want to go to cash, buy gold, take everything and buy a CD or Treasuries.  They hear the panic on the television and they are rightly afraid.  They are getting investment advice from Vince the Sham Wow guy and we have to calm them down and explain the dynamics of what is happening or at least pretend that we know.

I'm calling 15 to 20 clients daily right now to prepare them for the bad news, hold their hands and try try try to get them to come in and/or make some decisions about repositioning or staying put.   It seriously amazes me how some people don't want to make a decision, yet want to place the blame on us if...scratch that....when it all goes bat shit.   Possibly because I've had these clients for many years, through the 2000 crash and before, most seem to be takin things in stride and some even express worry for me because they know I'm stressed out.  (I'm drinking scotch right now to ease the stress )  The newer clients that I have who invested at the peak of the market are freaked and I probably will lose some of them, because they are grasping at straws and think they can find a better deal somewhere else.  So sorry.   I never promised you a rose garden.
For those who want to go to cash.... and crap...who can blame them.  I do what they want.  Move the mutal funds to mmkt fund.  Sell the most volatile stocks into cash/mmkt.    Tell them that we may be reaching a bottom but again...maybe not.  Who knows. My freaking crystal ball is broken.   If we have more downside (which I believe we will certainly have), well, at least we have stopped the bleeding.  When they feel comfortable in moving back into the market.....dollar cost averaging, just in case we are still not down.
After 9-11 the DOW got into the mid 7000 range.  It only feels so bad right now because the rapid downturn is unexpected to the general public and they don't understand.  Twin Towers falling, that they get.  Leveraged credit swaps ?  Nope.  The shake up we are going through has been coming for several years now and is going to change the financial industry for years to come.  Change is scary.
 
My client base is basically older pre retirees or retired and they aren't so concerned with growth, market timing etc.  They want to preserve their principal and stop the damage.
Right now I feel like the little Dutch boy trying to stop the leaking.  If the clients want cash....so be it.   It's their money.

ytrewq's picture
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Babs,You make some good points.  What we all have to remember is that this time is worse ONLY because it is happening now.  For example.A huge meteor slams into the earth and wipes out 98% of all life.  Kinda sucks but....Couple of million years later and the last 2 dinosaurs remaining are facing an ice age and global cooling like you could not imagine.  Here is the conversation:I know, that meteor thing was bad but times are different now.  We're cold!  They had it easy.  Atleast the explosion was hot.  This will never end.  Snow is in the forecast.  Fast forward.The earth warms.  The ice melts.  Conversation:Sure it was cold, but atleast you can WALK on ice.  Now it has melted.  They had it easy.  We gotta learn how to swim.Repeat.Thank goodness this business is this hard.  This is why we get paid so well.  Not many can do what we do.  DO NOT.  repeat.  DO NOT.  Get sucked into the "this is worse".  We are all our clients have to lean on.  You may not be able to stop their transactions but you can refuse to agree or encourage their self destructive panic/greed driven investments.My collateralized and leveraged $.02 worth.

gvf's picture
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I had a client who wanted to sell out of his Money market fund!! You know, bloomberg/cnn/msnbc is really playing up that Money Market Fund that lost 3 cents on the dollar, and they're really getting people worked up over money market for frack sake!  Not only did he have no exposure to lehman/AIG/WaMu in the mmk, but you know what he wanted to invest the difference in?  TRE.  The african gold mining firm.  That was a fun conversation. 

lady_trader's picture
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I believe more Money Markets could be next. Check Treasury yields yesterday after that announcement about the U.S's oldest money market account breaking the $1 NAV and freezing redemptions.
I know my reps were on a conference call about a year ago and management said that they found a SIV (Structured Investment Vehicle tied to mortgages) in our money market and to keep the the NAV at $1, they decided to take a write-down. Correct me if I am wrong, but I believe there were a few firms who had that happen.
 
Banks have lost so much money with writedowns, lackluster earnings, ARS buyouts, etc, that they simply can not afford to keep that NAV at $1 if it gets bad.
 
This is a question that I want to know. If short-term Treasuries are in the 1-2% range, why the heck are money market yields so much better? Meaning, what do they have inside them that gives them the additional juice?
 
I really believe the best alternative is a Treasury, 4-5 star bankrate.com brokered CD or an agency bond.
 

anonymous's picture
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Gotta love VA's with what's happening.  I spoke to a conservative client yesterday who was panicking because his account is down over $50,000.  The one thing that he wanted when we started working together was not to lose money.
 
Client: "I don't know what to do. I'm losing so much money.  Shouldn't I just move all of my money to CD's.?"
 
Me: "Joe, do you remember when he first put this account together for you and I told you that the worst case scenario would be that you would have a guaranteed income of $60,000/year for the rest of your life starting at age 75?"
 
Client: "Yes. I remember."
 
Me: "Now that the market has taken a significant hit and it may continue to go down, your worst case scenario has dropped to $60,000/year for the rest of your life starting at age 75."
 
Client: "That's what you just told me before the market drop."
 
Me: "Exactly!  A good market will ultimately help you get more, but no matter how bad things get your worse case scenario can't get worse...and it's pretty darn good.   Moving your money will negatively impact your worst case scenario and if the market improves, you won't be able to benefit."
 
I'm a broken record with the VA's.  I argue that the fees are pretty high and they can hurt people if they are used incorrectly, but they can be great investment vehicles if they positively impact investor behavior. 
 
 

Anonymous's picture
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As usual Anonymous, your posts are chock-full of awesome info...thanks!

bspears's picture
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I had a conversation with a retired farmer yesterday.  Didn't come in to change anything, but wanted to know my opinion.  He took everything I said and just before he left..he said, you know, its the little guys out here who are the last to know and the ones who are ususally left holding the bag.  I made a comment on here a month or so ago about pulling clients out of the market in Aug/Sept/Oct of last year,(those who would listen).  Putting in short term cd's, mmkts, short duration funds, inflation protected bond funds. I also talked with a Vet from Ed Jones who I still consider a good friend and he said he wouldn't put any money in bonds..(this was Dec 07), he's free thinker, manages 200 mil and likes his LP, but doesn't drink the koolaid. 
 
I got hammered by almost everyone on here, saying I was trying to predict the market.  Buy and hold is the way, and I'm destroying my clients assets.  Bottom line is, I am very skeptical of the research put out by ANY wall Street firm.  IT IS IN THEIR BEST INTEREST TO KEEP THE CLIENTS IN THE MARKET, NO MATTER HOW BAD IT GETS.  I work for my clients and my clients heirs, not LPL or Ed Jones or Morgan or Wachovia or anyone.  All this propoganda about staying in the market spewed by the big firms is skewed towards their self preservation. 
 
 My good friend at Morgan was telling me a week or so ago.."the lows are in"...the market is on the way up from here.  That was 1000 pts ago.  He has been advising with Morgan (dean witter before) since 1992 and has a book of 300mil.  HE is spewing Morgans research...he is not thinking for himself.  Any dumbass can step back and say...wow all these no doc loans for 500k mortgage for two walmart workers....hmmm....is this right.  You want 850k for an 800sq ft bungalow in a shady neighborhood....wow what a deal....where do I sign.  Greed is NOT good. 
Talked with another friend yesterday, lives in around Wake Forest.  John and his wife want to move back to Jersey.  He said when he put his house on the market last Spring, they were told there was 18 month supply for his price point.  He was told last week, there was now 42 weeks of supply.  They pulled it off the market.  It's not going to get better anytime soon...be prepared. 

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anonymous wrote:Gotta love VA's with what's happening.  I spoke to a conservative client yesterday who was panicking because his account is down over $50,000.  The one thing that he wanted when we started working together was not to lose money.
 
Client: "I don't know what to do. I'm losing so much money.  Shouldn't I just move all of my money to CD's.?"
 
Me: "Joe, do you remember when he first put this account together for you and I told you that the worst case scenario would be that you would have a guaranteed income of $60,000/year for the rest of your life starting at age 75?"
 
Client: "Yes. I remember."
 
Me: "Now that the market has taken a significant hit and it may continue to go down, your worst case scenario has dropped to $60,000/year for the rest of your life starting at age 75."
 
Client: "That's what you just told me before the market drop."
 
Me: "Exactly!  A good market will ultimately help you get more, but no matter how bad things get your worse case scenario can't get worse...and it's pretty darn good.   Moving your money will negatively impact your worst case scenario and if the market improves, you won't be able to benefit."
 
I'm a broken record with the VA's.  I argue that the fees are pretty high and they can hurt people if they are used incorrectly, but they can be great investment vehicles if they positively impact investor behavior. 
 
 
 
I have a few VA's that were funded in the last 6 months to a year that are down 15-20% right now. 
 
I'm sure I'll be having that exact same living benefit conversation.  "Hey Mr. Client, this is exactly why we purchased this annuity".

Anonymous's picture
Anonymous

bspears wrote:I had a conversation with a retired farmer yesterday.  Didn't come in to change anything, but wanted to know my opinion.  He took everything I said and just before he left..he said, you know, its the little guys out here who are the last to know and the ones who are ususally left holding the bag.  I made a comment on here a month or so ago about pulling clients out of the market in Aug/Sept/Oct of last year,(those who would listen).  Putting in short term cd's, mmkts, short duration funds, inflation protected bond funds. I also talked with a Vet from Ed Jones who I still consider a good friend and he said he wouldn't put any money in bonds..(this was Dec 07), he's free thinker, manages 200 mil and likes his LP, but doesn't drink the koolaid. 
 
I got hammered by almost everyone on here, saying I was trying to predict the market.  Buy and hold is the way, and I'm destroying my clients assets.  Bottom line is, I am very skeptical of the research put out by ANY wall Street firm.  IT IS IN THEIR BEST INTEREST TO KEEP THE CLIENTS IN THE MARKET, NO MATTER HOW BAD IT GETS.  I work for my clients and my clients heirs, not LPL or Ed Jones or Morgan or Wachovia or anyone.  All this propoganda about staying in the market spewed by the big firms is skewed towards their self preservation. 
 
 My good friend at Morgan was telling me a week or so ago.."the lows are in"...the market is on the way up from here.  That was 1000 pts ago.  He has been advising with Morgan (dean witter before) since 1992 and has a book of 300mil.  HE is spewing Morgans research...he is not thinking for himself.  Any dumbass can step back and say...wow all these no doc loans for 500k mortgage for two walmart workers....hmmm....is this right.  You want 850k for an 800sq ft bungalow in a shady neighborhood....wow what a deal....where do I sign.  Greed is NOT good. 
Talked with another friend yesterday, lives in around Wake Forest.  John and his wife want to move back to Jersey.  He said when he put his house on the market last Spring, they were told there was 18 month supply for his price point.  He was told last week, there was now 42 weeks of supply.  They pulled it off the market.  It's not going to get better anytime soon...be prepared. 
 
Be sure to let us know when your crystal ball tells you when to put clients back in the market...

bspears's picture
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Actually, I'll let you know after I move my clients...sorry, but I bet you would be one to jump in right before you told your clients to...frontrunner....

norway401's picture
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BSpears.....I for one did not comment on your observations. I do think that some people ( FAs ) actually do rely on the " Research " Department far too much and in fairness so do clients. Check out 1) Buy - of course most people already know , 2) Hold - we don't have an opinion , meaning  or  but nobody will ever be able to pin that opinion on me and finally 3) Sell - they decided to state the obvious it is
I was away on an Incentive Trip to LA and the thing that strikes me from listening , reading and observing there are a lot of fundemental changes going on in addition to the HEADLINES.
Check out the U.S Housing Markets ( Major ) I was stunned to see housing inventory in some cities ......3 or 4 YEARS and does not include the New Home inventory coming in to the system.

bspears's picture
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A few weeks ago, didn't you post you had some comments about China??  Well....

norway401's picture
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You are correct and if you recall I was not overly positive about China and some of the other Asian countries. I did mention I would only invest by proxy ie. P & G and other Western Companies.
For your interest you may want to read some of the concerns that are being expressed by Chinese Companies , as well as the beginning of ie. manufacturing starting to slide and growth not being realized. I assume you are referencing those postings?

jamesbond's picture
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Interesting comments by all. Instead of selling at the bottom maybe suggest shorting the market if you are convinced the market is going lower. Use an ETF. As for the money markets, most fund families have an FDIC insured money market account, place the money there. Your clients will be able to sleep better knowing it is insured. Dont buy treasuries because you are over paying right now. The mantra use to be flight to quality when the market goes down, looks like that means big pharma and consumer stocks now

norway401's picture
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jamesbond.....not a bad Mantra at all , has always made sense. Invest in quality and gamble in Casinos. I agree with Bonds as to over paying in the current situation.

bspears's picture
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Stepped out for lunch and had CNBC on while driving to the Post Office.  Sue Herrara was saying..."if you new to CNBC and looking for answers to this crisis, you've come to the right place and we will get you through it"....what a joke.  One of the worst things that have happened is the allday market news....worse than the damn fishing buddies someone else was commenting on...

snaggletooth's picture
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I was just talking to one of my favorite wholesalers who said he did an event with 3 advisors and 60 clients last night about how politics will affect things like taxes and stuff like that.
 
He said he was shocked that out of the 60 clients, not one person throughout the entire night asked any questions about the current state of the market.  Nothing.  It was like they are so terrified about all of this, they aren't talking, opening statements, checking accounts online, etc.
 
The sad thing is that I don't see anyway there can be a strong rally until MS and GS and the other problems are sorted out.

norway401's picture
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Snags .....I think that there are more than just the Financial Services that are part of this situation. On that note , check out who has bought Bank of Scotland. MotorCoach Industries filing and a lot of other things " bubbling in the pot ". I suspect we may next see some serious issues with Commercial Properties. Just my observations and opinion.

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snaggletooth wrote:I was just talking to one of my favorite wholesalers who said he did an event with 3 advisors and 60 clients last night about how politics will affect things like taxes and stuff like that.
 
He said he was shocked that out of the 60 clients, not one person throughout the entire night asked any questions about the current state of the market.  Nothing.  It was like they are so terrified about all of this, they aren't talking, opening statements, checking accounts online, etc.
 
The sad thing is that I don't see anyway there can be a strong rally until MS and GS and the other problems are sorted out.
 
Many of my clients are the same way.  "I'm not even opening my statements - I don't want to know."  I guess this is better than them opening them and second guessing everything we are doing.

Borker Boy's picture
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bspears wrote:I had a conversation with a retired farmer yesterday.  Didn't come in to change anything, but wanted to know my opinion.  He took everything I said and just before he left..he said, you know, its the little guys out here who are the last to know and the ones who are ususally left holding the bag.  I made a comment on here a month or so ago about pulling clients out of the market in Aug/Sept/Oct of last year,(those who would listen).  Putting in short term cd's, mmkts, short duration funds, inflation protected bond funds. I also talked with a Vet from Ed Jones who I still consider a good friend and he said he wouldn't put any money in bonds..(this was Dec 07), he's free thinker, manages 200 mil and likes his LP, but doesn't drink the koolaid. 
 
I got hammered by almost everyone on here, saying I was trying to predict the market.  Buy and hold is the way, and I'm destroying my clients assets.  Bottom line is, I am very skeptical of the research put out by ANY wall Street firm.  IT IS IN THEIR BEST INTEREST TO KEEP THE CLIENTS IN THE MARKET, NO MATTER HOW BAD IT GETS.  I work for my clients and my clients heirs, not LPL or Ed Jones or Morgan or Wachovia or anyone.  All this propoganda about staying in the market spewed by the big firms is skewed towards their self preservation. 
 
 My good friend at Morgan was telling me a week or so ago.."the lows are in"...the market is on the way up from here.  That was 1000 pts ago.  He has been advising with Morgan (dean witter before) since 1992 and has a book of 300mil.  HE is spewing Morgans research...he is not thinking for himself.  Any dumbass can step back and say...wow all these no doc loans for 500k mortgage for two walmart workers....hmmm....is this right.  You want 850k for an 800sq ft bungalow in a shady neighborhood....wow what a deal....where do I sign.  Greed is NOT good. 
Talked with another friend yesterday, lives in around Wake Forest.  John and his wife want to move back to Jersey.  He said when he put his house on the market last Spring, they were told there was 18 month supply for his price point.  He was told last week, there was now 42 weeks of supply.  They pulled it off the market.  It's not going to get better anytime soon...be prepared. 
 
Funny you brought it back up, spears, because I was actually thinking about your highly entertaining market-timing thread just the other day.
 
So, those of us who believe in buying quality, diversifiying, and holding for the long term have it all wrong? Even your Morgan buddy who is managing a $300 million book? If he's been around since '92, he's had several opportunities to give advice during turbulent markets, and by the size of his book, I'd say he's given solid advice.
 
So the point in your post about the farmer is that none of us idiots have any clue as to where the bottom is (one of the few things about which you're correct), but you feel it's best to react to your clients' fears and at least do something to pacify them?
 
Having taken your clients out of a very volatilve market means little unless you know exactly when to get them back in. And I'll wager that you'll end up missing a huge rally and will significantly underperform those of us who are providing the only advice that is time-tested and true.

babbling looney's picture
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Clients who want to go to money market funds right now (not liquidating stock and bond positions) need to be told a few things. 
First...money market funds are not guaranteed.  In fact, one broke the dollar for dollar threshold today. 
 
Second.  How do we know that the market has hit bottom or that it still has more free fall to go?  We don't.   If we take your money and put it into MMKT and the market continues to fall, we have stopped the bleeding for now and look pretty smart.....BUT....what if we move out and there is a sudden rebound?  We have lost the window of opportunity.  Most funds require you to be in the mmkt option for 30 days before getting back in.  The market can go up just as fast as it goes down as we have seen today.  By being on the sidelines, we may miss the opportunity to rebound and recover.
 
We can dollar cost average into the market at a later date, but again.  Who knows where we are on the cycle. 
 
It's their choice.   Move to the sidelines or  diversify and stay in the game.  It's our responsibility to make sure they know the pitfalls of all decisions.

Borker Boy's picture
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I found this headline from last May especially entertaining. I hope he's also wrong about his predictions for stock market returns in future years. 
 
 
 
 
 

Buffett says risk of financial meltdown has declined
But Berkshire chairman also cautions on bank risks, lower stock returns

By Alistair Barr, MarketWatch
Last update: 5:37 p.m. EDT May 3, 2008
Comments: 218

OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett said Saturday that the risk of a major financial meltdown has declined recently but cautioned not to expect big gains from the stock market in future years.

snaggletooth's picture
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Borker Boy wrote:I found this headline from last May especially entertaining. I hope he's also wrong about his predictions for stock market returns in future years. 
 
 
 
 
 

Buffett says risk of financial meltdown has declined
But Berkshire chairman also cautions on bank risks, lower stock returns

By Alistair Barr, MarketWatch
Last update: 5:37 p.m. EDT May 3, 2008
Comments: 218

OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett said Saturday that the risk of a major financial meltdown has declined recently but cautioned not to expect big gains from the stock market in future years.
 
Even the Oracle from Omaha can be wrong occasionally.  Maybe we should print this out and show our clients that get upset at us?

bspears's picture
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My clients are happy.  You may disagree with me along with your disagreement with Fees, Commissions, the market, Edward Jones..whatever else your bitchin about this week...but the bottom line is they're happy...and have a good story to tell their friends at the coffee shop when their friends are pissing their pants...and alll Borker could tell them was buy and hold...and Gertrude says "Is he the same guy who was sellin paint at the local hardware store"....

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B24
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Liar.

snaggletooth's picture
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babbling looney wrote:
BUT....what if we move out and there is a sudden rebound?  We have lost the window of opportunity. 

Like what, an 800 point jump in 2 days?

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Joined: 2007-07-13

ytrewq wrote:I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)Client wants to move whole portfolio of various mutual funds to cash because market is too risky.Next he wants to know what I think of $50,000 each in gold and silver.I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).At first he laughs at me.  When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.The bottom is near and if not we will all be replaced by guys that fish.
 
I wonder if your idiot client knows that gold had its worst day in 25 years:
 
http://www.marketwatch.com/news/story/gold-tumbles-most-25-years/story.aspx?guid=%7B767C1A82%2D6873%2D49E6%2DAC48%2D933C4E940035%7D

norway401's picture
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Snags...or the client can wait for Government/s to step up and print even more money and take over bad loans or failed companies The Financial Companies that earlier this week were considered " dead in the water " are now the " Belles of the Ball ". Change ....what change , oh must be being rewarded ( covering the losses ,  incompetence and greed ) by the taxpayers. Keep Printing The Money

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norway401 wrote:Snags...or the client can wait for Government/s to step up and print even more money and take over bad loans or failed companies The Financial Companies that earlier this week were considered " dead in the water " are now the " Belles of the Ball ". Change ....what change , oh must be being rewarded ( covering the losses ,  incompetence and greed ) by the taxpayers. Keep Printing The Money
 
Don't get me wrong, I don't think this rally will sustain.  There's too much crap out there, I think it will take a long time to work itself out.  The consumer is already strapped, and if the tax payers are left holding this bag, I think the consumers will be dead especially since home prices are so far down.   
 
I do think we ride this rally for a little bit and use it as a time to make adjustments to portfolios as needed (shifting to more conservative investments, getting out of bank preferreds, etc). 
 
I also think we should be getting ready for the next leg down.  In other words, the government's action is just a band-aid. 

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snaggletooth wrote:ytrewq wrote:I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)Client wants to move whole portfolio of various mutual funds to cash because market is too risky.Next he wants to know what I think of $50,000 each in gold and silver.I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).At first he laughs at me.  When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.The bottom is near and if not we will all be replaced by guys that fish.
 
I wonder if your idiot client knows that gold had its worst day in 25 years:
 
http://www.marketwatch.com/news/story/gold-tumbles-most-25-years/story.aspx?guid=%7B767C1A82%2D6873%2D49E6%2DAC48%2D933C4E940035%7D
 
And one of it's best.....
 
Most indivduals misunderstand gold.  They think it is "rock solid".  Well, it is.  But, the VALUE is not nearly as solid.  Case in point.....
 
Just two days ago I picked up 150K from an older lady (70'ish) that wanted to be "really safe" with some cash she had sitting in checking.  We opted for a ladder of CD's.  I am not taking any chances, as her time horizon is not that long, and Treasuries, well, you know what's going on with those rates.  So we laddered out to about 4 years, at an average rate of around 3.5%.  She calls me today and says "oh, B24, did I do the right thing?  I am so nervous about this market.  Should I have just put it all in gold?"
 
Riiiight.  So today you would have 150K, tomorrow you might have 125K, and the next day you might have 160K.  5 years from now you may have 80K or 200K.  Rock solid.  Why don't we just bet on the price of oil instead?

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Your clients call you B24???? 

norway401's picture
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Ice.... that was going to be my question for B24 too

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snaggletooth wrote:babbling looney wrote:
BUT....what if we move out and there is a sudden rebound?  We have lost the window of opportunity. 

Like what, an 800 point jump in 2 days?
 
Exactly!  Those clients who insisted in going into MMKT can't say I didn't warn them.    Actually most people that I called and that  have been calling me are willing to stick it out and even a few have put more money in.  One of my more agressive clients bought 1000 shares of WM at 2.10.  Said so what if he loses it.  He figured he would either be out the money, get shares of another bank (maybe) if they are aquired or double his money at least if the government steps in.  (I bought some too after he did )
 
Only the very old clients (80 yrs) said they didn't care if it rebounded, they JUST wanted to not see any further loses.
 

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babbling looney wrote:snaggletooth wrote:babbling looney wrote:
BUT....what if we move out and there is a sudden rebound?  We have lost the window of opportunity. 

Like what, an 800 point jump in 2 days?
 
Exactly!  Those clients who insisted in going into MMKT can't say I didn't warn them.    Actually most people that I called and that  have been calling me are willing to stick it out and even a few have put more money in.  One of my more agressive clients bought 1000 shares of WM at 2.10.  Said so what if he loses it.  He figured he would either be out the money, get shares of another bank (maybe) if they are aquired or double his money at least if the government steps in.  (I bought some too after he did )
 
Only the very old clients (80 yrs) said they didn't care if it rebounded, they JUST wanted to not see any further loses.
 
 
Yeah, I had a guy call me like 2 months ago and was thinking of moving some of the account to cash.  I told him that we are here for the long term, we should wait it out.
 
On Tuesday, the guy calls me and says, "I should've pressed you harder.  You didn't want to move to cash.  I think there is more to come.  I'm going to think about it tonight and call you tomorrow".
So on Wednesday, he calls and asks, "What's the market at?"  I say, "Well it's down about 275 today".  He says, "OK, let's move half to cash". 
 
Since he threw it in my face about having him stay invested, I wasn't arguing this time. 
 
The very next two days we go up almost 800 points.  Talk about selling low.

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That's when I have the clients sign the "I told you so disclosure"  When they absolutely go against what I have recommended and if I feel strongly enough about it.
 
"On xx date,  Mr. Client and I discussed the purchase/sale of XX security.  My recommendation is XX for these reasonsXXXXX
 
Against my recommendation Mr. Client has decided to purchase/sell XX security."
 
Client and Rep   Sign and date here X_____________________________
 
Copy to client and original in their file.
I've been known to be wrong and the client made a good decision...... but in case I'm not wrong..... this can save your butt from arbitration.
 

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Is everyone missing the reason I started this post?  I generously shared my secret to picking the bottom of a market decline.  Years from now they will not be talking about Graham or Dodd or Jeremy Siegel or even Warren Buffet!  It will be YTREWQ.  College courses teaching my complex and highly comprehensive method of picking market bottoms.  for exampleI went to Hartford and got my Doctorate in "Three Guys in a Boat".  That is why you should invest with me.Seriously, for those here that are commenting as true professionals Thank You.Those who claim to know things before they happen please find a new career before our profession is once again considered a scam and high pressure sales.The rest of us have worked too hard to gain respect for this profession to have a foolish few  of you destroy it by claiming to know things before they happen.  Oh, just for kicks, tell me what number I am thinking of and then do it again.  This time before I actually think of it.  Gimme a break.   Hartford=Harvard.....I am sure you all knew that.  Thank God it is Friday night. 

ytrewq's picture
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babs,I put that same letter in front of the 4th boat guy.  It made him say, "hmmmm you must be serious".

troll's picture
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ytrewq wrote: Is everyone missing the reason I started this post?  I generously shared my secret to picking the bottom of a market decline.  Years from now they will not be talking about Graham or Dodd or Jeremy Siegel or even Warren Buffet!  It will be YTREWQ.  College courses teaching my complex and highly comprehensive method of picking market bottoms.  for exampleI went to Hartford and got my Doctorate in "Three Guys in a Boat".  That is why you should invest with me.Seriously, for those here that are commenting as true professionals Thank You.Those who claim to know things before they happen please find a new career before our profession is once again considered a scam and high pressure sales.The rest of us have worked too hard to gain respect for this profession to have a foolish few  of you destroy it by claiming to know things before they happen.  Oh, just for kicks, tell me what number I am thinking of and then do it again.  This time before I actually think of it.  Gimme a break.   Hartford=Harvard.....I am sure you all knew that.  Thank God it is Friday night. 
 
Some of us don't know when it is going to rain, but we are smart enough to recognize water falling from the sky and prepared with an umbrella nearby.

snaggletooth's picture
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ytrewq wrote: Is everyone missing the reason I started this post?  
 
When you're 5 pages deep into a thread, no one cares why it was started. 

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