Tips To Hire A Good Financial Adviser
Sun Jan 11, 2009, 1:07 am | Leave Comment
Issue# 1
Back in 1996, for the first time, I got Internet access, the dial-up 28K bps. Man! Was it fast! One of the first things I did was to look for some news about Yahoo, Excite, Lycos and a couple of other privately held companies. I had read in newspaper that they were just about to be offered to the public, in a big Initial Public Offering (IPO).
I told my wife, between Yahoo and Excite, whichever goes public first, I will buy some shares in it. Instead of Yahoo that I really wanted and there was a big buzz about it, I bought shares in Excite, because it was offered to the public first, before Yahoo. A week or so later, Yahoo went public. Both companies, at the time, were doing similar things.
Of course, that was before the dot com bust which happened, I think in 2000 or just about. That was my first time that I ever bought shares on my own. It was so easy. I used Charles Schwab online service.
Then the next 2 to 2 1/2 years, Excite share kept going up and down. Finally, in 1999, it was giving us $20,000 profit so I sold it, every single share. I was in Minneapolis, MN at the time. Believe me when I say, from then on, I would see numbers on the screen, not dollars.
I would talk to my wife about that. With $20,000 profit, in my pocket, or rather the number 20,000 on the screen, my wife and I went on a buying spree and bought some shares in Microsoft, Cisco Systems, and a few other companies. All we were investing, online, were some numbers. That’s all.
That’s why it is so easy to buy groceries, clothes and other things with credit cards. We do not see actual money. They are just numbers.
We never sold those shares. You know why? For us, it was so easy to buy but very hard to sell. Otherwise, we would have made some excellent profit back then. The price is way down now to sell any of them. The best thing for us and a lot of other people is to stay put and not panic.
That’s when we figured we needed to find a good Financial Adviser.
Issue# 2 or stupidity on my part
Another thing, I would call it stupid just stupid on my part. I received a newsletter in the beginning of 2006. In that newsletter, the author had claimed to be an investment guru. What he touched turned into gold. He was promoting Delta Oil & Gas Inc. (DOIG).
The newsletter stated that the stock would be as high as $20 in three years. Well, it is almost three years now and the stock price is 3 cents. I bought it for $3.46 a share in Feb. 2006. I used my IRA account.
The moral of the story is two fold:
- If you buy shares online, always think of the numbers as dollars and not just numbers.
- When you receive a newsletter like that, you know what to do with it. Send it straight to your trash can. No questions asked because there is no one to answer your questions.
As always, if you want to be on a path of financial success:
- Pay special attention to your personal finances.
- To invest, find a good financial adviser.
- To be debt-free, find a good credit counselor.
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