Even though the best financial consultant you could ever hire stares back at you every day when you look in a mirror, for those of you absolutely unwilling to learn how to do-it-yourself, here are ten tips to help you find that one financial consultant out of every 1000 that actually is fairly impressive.
To help me formulate this list, I considered some of the absolutely useless investment strategies I had learned at the world’s leading investment firms as well as the ridiculous focus of some boutique firms I had spoken to when formulating the long tail investment strategies that constitute the curriculum of my SmartKnowledgeU™ campus.
About five years ago, as I was just starting to develop and test my investment strategies that I now use today, I interviewed with a smaller, boutique investment firm in the Bay area of San Francisco that has a stellar reputation in the mass media as being on the cutting edge of revolutionary investment strategies. I thought to myself, if anything can reveal how far the top investment firms have evolved in their strategies to incorporate a changing information landscape to identify better investment opportunities, it will be my interview with this firm. Needless to say, I was stunned by the fact that this firm’s strategies basically mirrored the same, old, strategies of every investment firm on Wall Street.
A top manager at this firm proceeded to ask me five key questions (key to him at least) that he strongly believed was important to making intelligent investment decisions. However, I felt that his questions were either irrelevant or too unfocused to be of any worth. I was astounded that this firm had managed to gather billions of assets from private individuals. After witnessing the incompetence of this top manager at a top investment firm in the United States, I was merely convinced that hundreds of thousands of people have been duped and bamboozled by very strong salesmen that are able to effect the appearance of investment experts but in reality, know close to nothing.
The only problem with this scenario is that since most people do not know the right questions to ask, they never learn that their trusted advisors know next to nothing. If investors don’t know the right questions to ask, investors can ask a hundred questions and still not receive any answers that will help him or her assess the level of that financial advisor’s competence. Ask better questions, receive better answers, and improve your returns three fold, four fold or even more.
So here are 10 questions to get you started:
(1)What is your strategy to select individual foreign stocks?
I’m not a fan of mutual funds. I know all about their hidden expenses besides the overt fees they charge, plus I don’t like the fact that a lot of foreign mutual funds take a beating whenever the masses have the slightest fear about a pullback in the markets. I think owning individual stocks is a much better strategy, especially in foreign markets.
(2)What strategies do you personally use to give me a good chance of earning 20% or higher without assuming great risk?
Look, I’m going to be honest. 6%, 7% even 10% a year doesn’t cut it for me.
(3)Where do you think will be the best performing markets for the next five years? What percent of my portfolio will you devote to these markets?
b>(4)This question is a follow-up question to (3). If the answer to question three was, for example China, Canada and Australia, then ask, How much of my portfolio should be in Chinese, Canadian & Australian stocks and why?
(5)If answer (4) does not make sense in response to answer (3), probe with more questions.
For example, if the answer your financial consultant tells you is 20% tops, then ask, If you tell me hands down that the best markets for the next five years will be in China,India and Australia, why are we only allocating 20% of my portfolio to these markets?
(6)What are the best asset classes to be invested in for the next five years and why?
I don’t want the standard diversification strategy applied to my portfolio that you apply to every other client here. I think it’s a terrible way to build wealth and don’t agree with it. Look at all the great individual investors that were able to build wealth by determining what assets were the best and then concentrating their investments in just a few asset classes.
Even if you tell me ,”Look at Warren Buffet who was a buy and hold buyer”, today we live in different investment times. The horse and buggy was the best way to get around at one time but not anymore. Investing has changed, and what worked in the past is not the best way to invest today.
(7)What effect will the global currency markets have on the best and safest places to invest this year and why?
(8)How are you using technology and the internet to improve portfolio performance for me?
What novel strategies do you use that leverage technology and increased accessibility to top-tier financial, economic, and political information to grant me the best chance of earning stellar returns?
(9)How will you safely invest in developing markets for me?
A lot of the best performing markets are emerging markets that also are prone to huge corrections. And remember I don’t like mutual funds and I don’t think mutual funds are safe either.
(10)Tell me 3 things that you do that no one else at your firm does in managing my money and why.
To understand what many of the answers of these questions should be, feel free to visit the Free Educational Resources at http://www.smartknowledgeu.com. If you receive intelligent answers to all the above questions, you may have just found yourself a winner.