Why don't they just flush their money down the toilet

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Why you shouldn't use a financial planner to manage your money

I've been doing a bunch of networking lately and I always run into financial advisors as you can imagine.

Wht really amazes me and it really shouldn't because I've been doing this for over 20 years is that 99.999% of the financial people I run into really don't know what their doing when it comes to managing peoples money. Most of them run some kind of computer generated program that tells them that the client is conservative,aggressive fairly aggresive ,very aggressive etc etc etc.After that is done it has these prepackaged portfolios where you should allocate into anywhere from 5-20 different "products" usually mutual funds and usually based on something called modern porfolio theory.

Thisnever worked for me because I don't get putting 30-40-50% of your investable assets into underperforming sectors and call it asset allocation/diversification.

Doesn't it make more sense to over allocate to those sectors that are outperforming.Of course it does but these financial people have been brainwashed into thinking if you diversify your doing the right thing. Plus it takes them off the hook.

Then they go on to tell me that no one can time the market and I try to tell them that no one is trying to time the market but if you followthe trend you don't have to time the market. You get in when the market is in an uptrend and you lightnen up when the market is in a downtrend.

It'sfinally occurred to me after 25 years that I am pretty unique in what I do. But what I don't get is why these people think there doing a good job for the client.

look I was a CFP(certified financial planner) but I dropped it because I wasn't interested in financial planning. I figured it out that financila planning is telling a client to saveas much as they can earn as much as they can and invest as much as they can. Thats basically financial planning.

So I decided that I would become an expert in one area and that area is managing money/making it grow/capital preservation. i still believe there is a place for insurance and estate planning but I leave that to others.

Good day but no real clarity

Well my tippy toeing back into the market is looking pretty good right now but we'll see how it all plays out.

Now to correct any misinterpretations I never got fully out of the market. As long as relative strength of stocks remains the strongest sctor out of cash and bonds I will always have money in stocks.

I did pull a bunch of money out when the s&p couldn't make a new high and reversed down. this is a capital preservation technique that I use.It just so happens that the s&p turned back up last week and with that I started to redeploy some of the money I had taken out.Net net I am aboout 60-70% invested.

We'll see how this all plays out.We're in a uncertain period with the market right now so it pays to pay attention and if anything to err on the side of caution in my opinion.

When the market is clearer you can always make up for not being in but when you lose your principal your fighting so hard just to get back to even.

Does this sound like you

Met with a prospect over the weekend and like a lot of people i run into he and his wife have accumulated a nice little pot of money. And like a lot of people they are not interested or i should say haven't been that interested in watching their money. Again, like a lot of people out there they have gone thru a bunch of so called financial advisors.

Well now there looking toward retirement and we sat down and looked at their investments. It turns out that they had a financial advisor from a bank run some kind of computer program and from what i could tell it came back as being fairly aggressive.The problem is they have 70% of their money in bond funds and thats where its been for some time. I suppose to that financial advisor that was aggressive. the problem is that a computer program makes assumptions of whats going to happen in the future as far as returns on investments. thos predictions are rarely correct.

Net net it looks like over a 7 year period they are basically even

If thats what you want in your financial advisor than stay the course and hopefully after 7 years you'll be even. But if you want to grow your money you need someone that actually manages your money which is not rocket science.

I use a basic risk averse method of managing money. I follow the trend. What does that mean? It means I compare the relative strength of stocks bonds and cash and whichever of those three is strongest is over weighted. When the trend changes I change. Something as simple as this lets you ride the trend for big gains and will get you out and avoid the big downs.

Thats the simple explanation of what I do but from being in this business for over 20 years just doing that would be doing more than the majority of financial advisors that i have met

I love when you have a nice pullback like today. It gives me a chance to deploy more money.
My guide right now is the s&p chart. If it drops back to 1250 I will need to take defensive action of some kind.
But right now with stocks being the strongest sector I will be adding tomorow morning. Like I said in my last post i will be tippy toeing back in with the money I have pulled out over the last month.
Right now it looks like decent risk reward and with me its all about CAPITAL PRESERVATION
I will be moving my 401k clients back into small cap growth slowly.

Tippy Toe back in to the market

Well the move to 1290 on the spx turns my indicators back to positive and i am starting to redeploy some of the money i took off the table.

Realtive strength wise stocks never lost their ranking as the place to be but the trend became unclear and having capital preservation as my number 1 goal i took off some money.

With the upmove on the spx and the fact that the nasd has made a higher high comming off the pullback gets me a little excited to redeploy some cash. The stop points are much clearer now

What now

Well I got stopped out of my qqq's that I bought on monday for a small loss.

Now just going to sit with what I have until this market shows more clarity.

At this point all I care about is CAPITAL PRESERVATION.

Although based on relative strength stocks are still favored over cash or bonds the strength has been decreasing.

I have been reading all kind of "experts" some say market is going to explode up and some say its going to explode down. Just like sports experts they have no clue.

You have to follow the trend and right now the trend is a little murky so its best to raise some cash and wait until the smoke clears.

The Big Bounce

Well as said Sunday night I bought the qqq's on Monday morning for my accounts and we've had the bounce . The question is where do we go from here. And the market will tell us in due time.

Blogs i like to read

http://feeds.feedburner.com/jamesaltucher

http://www.businessinsider.com/

http://howchow.blogspot.com/

http://www.michaelcovel.com/

http://systematicrelativestrength.com/

http://abnormalreturns.com/

http://www.hocorising.com/

So here we are on Sunday evening looking at the charts.

I'm looking at the qqq and am thinking I might be buying it around where it closed $54.64 with a stop of $54

Other than that I am pretty content with the way my accounts are allocated. Pretty much 50% cash 30% in rsp(equal weighted s&p) and 20% in a few short etf's.

Any reversal up in s&p ,which would be 1300 based on fridays close and i will close my short etf's and add to either spx or rsp.

Then the quesion will be can the s&p make a higher high 1380 or will it make a lower high before reversing back down

It has to be noted that based on relative strength stocks remain the place to be. I have reduced my allocation because I believe in capital preservation 1st and foremost

so we rallied a little

Nothing really changed today. The only positive that I see right nowis that sentiment is extremely negative which is a positive for the market.

But right now i am basically 50% invested and would keep my powder dry unil I see a reversal to the upside

relative strength still favors stocks and still favors small cap mid cap large cap in that order

asset manager

Being an asset manager I've been warning people for quite some time to pay attention to their money. This market is on shaky ground and it doesn't hurt to take some money and put it into money market until the picture clears up.

All of my decisions are based on comparing the relative strength of stocks,bonds and cash.Stocks are the strongest asset class on a relative strength basis and have been since March of 2009 but that doesn't mean that there won't be corrections.

I have been lightning up on stocks for the last few weeks. My philosophy is based on preservation of capital. there will always be another chance to get invested but if you lose capital its much harder to get ahead

My very 1st post

Well- what can I say--the market sucks so be very careful-be patient

relax

Not a bad 1st post