Questions for your broker or adviser after their mutual fund recommendation

by brendon on January 5, 2012

Kansas City fee-based advisers, financial planning firms and brokers should consider these questions before making recommendations to their clients to “buy”.    You don’t need to know EVERYTHING to be a better financial manager and investor.  You just need to know the answers to a few critical questions.   Thanks to Dan Solin, a regular contributor to Huffington Post for highlighting these.

Leave me a comment below and tell me what you think of these questions too.

1. Why are you able to identify just a couple of managers who you believe have genuine investment skill out of the thousands out there?

2. If you are basing your recommendation on their past performance, doesn’t the SEC require disclosure that past performance is no guarantee of future results?

3. Did any of your clients actually capture the returns you are touting?

4. How many years of data did you look at before you concluded the fund manager has genuine investment skill?

The answers to these questions will quickly expose the folly of the exercise of trying to identify in advance fund managers with legitimate investment skill.

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