Money
What to Ask Your Broker When
Your Portfolio Has Collapsed
These eight questions will help you decide if he messed up,
what can be done about it now, and if you need to move on.
MAKING MONEY Is your broker working
for you, or is it the other way around?
strangers working for a large fi rm?
It’s important to establish a level of
trust and an open exchange of invest-
ment goals and risk tolerance. If you
can’t meet someone in person, then get
on the phone with someone assigned
to deal with portfolio strategy but who
doesn’t necessarily have an agenda
about selling his own fi rm’s products.
2
Where are you putting
your own money?
As with building a relationship, you
need to know this about your broker.
If an adviser sold everything as the
market was tanking, it may appear
disingenuous to advise people to ride
out the recession without evaluating
possible reallocations now. Or, if he
is advocating a long-term recovery
and growth strategy, he would be
more believable if he were putting
that into practice himself.
By Scot Petersen ments about any investing strat- 3
What’s the plan?
A savvy broker should have cli-
egy at this time,” said Marketwatch ents set up with a well-diversifi ed,
S
INCE SEPTEMBER, THE IMAGE OF A STOCK Retirement Weekly columnist Robert actively managed portfolio that con-
broker has been that of a pitiful sort Powell. “It depends on the situation.” tains a mix of stocks, bonds, mutual
with his head in his hands. Amusing, Assuming that your portfolio has funds, money market funds, and
perhaps, unless it’s your broker. been hit hard, here are eight ques- other instruments, including deriv-
At a time when few investments tions to put to your broker to ensure atives, precious metals, and other
look attractive and brokerage houses you’re still getting the best advice. hedges against loss or infl ation.
are going bankrupt — or, like Merrill Most investors have knowledge
Lynch, being swallowed up by large of where their money is, but little in
banks — many investors are won- 1
Can we meet for lunch?
Advising someone on fi nancial the way of active management when
dering about the real role of today’s matters is a big responsibility. Why it comes to responding to market
fi nancial adviser. pass on that responsibility to a total conditions.
“It’s hard to make blanket state- stranger or to a group of nameless The scope of the plan an adviser MEN/© 2008 JUPITERIMAGES CORP.
70 NEWSMAX MAXLIFE / JANUARY 2009
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