He then proceeded to watch his roughly $100,000 401k stocks lose half their value. They never recovered.

A female friend of mine more recently (early 2008) wanted to go into more conservative or even bearish (betting that the market would go down) positions with her holdings. HER broker yelled at her and refused to do what she requested. She proceeded to lose a huge amount of money, too.

Both of these “advisors” should have been arrested and thrown out of the profession, losing their licenses, and worse. Unfortunately neither of my friends had balls enough to kick these advisors in the teeth as they deserved and these people still “practice” (as in fake it until you make it?) financial advising professionally.

Joe and Jill Average are always getting screwed by financial advisors.

Sometimes it can be helpful before choosing an advisor to find out what car they drive and what neighborhood they live in. If they’re driving a Subaru and live in a tiny house in the ‘burbs, then they’re not making money - and you’re unlikely to, either, if you work with them.

I read your article and our firm, as many others, got frozen out when the securitizations ended. Financial credits markets are still frozen as commercial banks are using TARP money for their reserves and takeovers rather than disbursement into the marketplace. 2009 will see tremendous defaults in the commerciall real estate market as most loan interest reserves will run out and properties will not be able to make their pro-formas.. thus commercial real estate developers are now also seeking bailout money which if provided by the government will also be ultimately paid back to the banks which will then too be placed into bank reserves and still frozen..

I am now looking for another job .. any thoughts.

I feel your pain. A lot of people feel your pain. Here’s a great video that explains a lot in 10 minutes. Peter Schiff, whom I do not know, was warning everyone 2-3 years ago about the impending crash and most of the experts literally laughed at him (you’ll see them laughing in the video). After watching this, I recalled my grandfather saying he didn’t trust bankers or brokers. Now I know why.

http://lhote.blogspot.com/2008/11/peter-schiff-vindicated.html

“All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies”

- Warren Buffett

‘For some of J.F.K.’s best and brightest, Halberstam wrote, wisdom came “after Vietnam.”

We have to hope that wisdom is coming to Summers and Geithner as they struggle with our financial Tet. Clearly it has not come to Rubin. Asked by The Times in April if he’d made any mistakes at Citigroup, he sounded as self-deluded as McNamara in retirement.

“I honestly don’t know,” Rubin answered. “In hindsight, there are a lot of things we’d do differently. But in the context of the facts as I knew them and my role, I’m inclined to think probably not.” Since that interview, 52,000 Citigroup employees have been laid off but not Rubin, who remains remorseless, collecting a salary that has totaled in excess of $115 million since 1999.

You may be touched to hear that he is voluntarily relinquishing his bonus this Christmas.

Rubin hasn’t been seen in a transition photo op since Nov. 7, and in the end Obama chose Paul Volcker as chairman of his Economic Recovery Advisory Board. This was a presidential decision not only bright but wise.’

Hope you are OK. Back to my reading.

Interesting that you should mention Michael Lewis (author of, among others books, “Liar’s Poker” and “Moneyball.” I heard him interviewed on NPR just yesterday evening. Not only is the guy fabulously articulate, he’s also got a great sense of humor.

He just came out with “Panic: the Story of Modern Financial Insanity,” in which he demonstrates some spot-on insight into why we’re in the mess we’re in. I’m only sorry that it’s coming out too late to help you save your nest-egg. Perhaps you can at least use the book to beat your broker about the shoulders (as I assume he lost his head along with all of the others some time ago).

Russell

Fortunately though, my financial paranoia, largely acquired through observing stock market machinations in recent years, saved me from believing a word of Mr. Selengut’s book. First, I was put off by its title . . . isn’t it obvious by now that “Wall Street” DOES want us to read, absorb and act on any information or misinformation that encourages to invest in anything that’s commissionable?

Then I dipped into the book and found it to be a badly written, poorly edited, cleverly rearranged pile of tripe taken from 100 or so other how-to-invest books. What a brainwashing job it is itself!

Note from the Wicked Witch of Publishing (TM): No, I don’t think Steve is ill-intentioned. In fact, his book does take on established Wall Street. And, yes, the original book — the one I was sent — was badly in need of a new cover, new title, and serious editing. (Welcome to the world of self-publishing!) Still, I was able to nose around the text and dig out an actual methodology that I could understand. The book also included information about when to sell: DON’T HOLD A STOCK FOR MORE THAN A YEAR IF IT IS NOT PERFORMING and BETTER YET, SELL IT AFTER SIX MONTHS. IF THE STOCK IS DOWNGRADED, HIGHTAIL IT. IF IT STOPS PAYING DIVIDENDS, RUN. What you want is a financial adviser who follows his own advice! The lame “Don’t look back” response by the broker may work for the broker, but it doesn’t work for the investor who has to rate performance and factor in liquidation value at any given time.

Unfortunately I had to leave for a meeting before he finished, but he was rather optimistic. He claims that this country can handle a large deficit - and should, to cure the mess we’re in. He says that we can afford to bail out banks etc. and quoted forgettable percentages, but that the European governments are too small and the debts too large, and they will be in far worse trouble. Job’s comfort, when nothing seems to be working, the banks aren’t lending, and so on, but let’s hope he’s right.

The conventional wisdom used to be that for the long haul equity investments were the best way to grow wealth, but in this recession, who knows. However, today’s NY Times promotes buying into financial companies now.
I’ve lost plenty but am hanging onto my beaten-down stocks.