Stock Advice So Bad It Will Make You Cringe

Since retiring from Ma Bell in 1998 I have spent a bit of time managing my retirement accounts and watching the stock market run like a bull and walk/crawl like a bear. So my interest was peaked when I saw a Motley Fool article titled Stock Advice So Bad It Will Make You Cringe. The post is a reaction to a "Rich Dad Stock Success" seminar that staff members attended back in January. Here is a few things they agreed with the speaker on:
  • Investing is risky and could result in losing money.
  • Everyone's goal should not be to get rich quick, but to "get educated."
  • Illiteracy was the foundation of financial struggle.
  • The rich are that way because they "know how to compound."
The seminar then shifted to something they call cringe-worthy. Some of their feedback:
What was appalling was how actions and words so massively diverged. The earlier evangelizing about education was twisted into an unrecognizable form. This wasn't about education -- unless you count "learning how to read a green arrow and a line crossing another line on a chart" for knowing when to buy a stock.
I know a disaster when I see one. If you know someone considering one of these workshops, warn them that they won't learn much. Here's a direct quote I scribbled down: "I couldn't care less about why a stock goes up -- as long as it is." So much for education.
In the end, the most discouraging part of the seminar wasn't what was said or what went unsaid: It was the captive audience hungry for education. Some uniformed military who'd just gotten off work, some parents with their young kids -- they all wanted to learn about investing, but didn't. Those seeking true investing education at the Rich Dad Stock Success seminar instead got the quick-start rundown of how to use a software system.
That last statement so mirrors my experience with financial advisors who depend on software driven models and really cannot explain in simple terms why they prefer one stock or fund over another. If you encounter on of these folks I suggest your run. Following are a few of the Motley Fool's 11 must-do's for anyone wanting to learn about investing:
  • Don't buy stuff you can't afford.
  • Only invest money you don't need for at least the next five years.
  • Challenge others and seek to have your own opinions challenged.
  • Realize that there aren't any shortcuts in investing.
There are several suggested reading articles in the list that you also might find helpful. I suggest that you check them out if you are new to investing.

Do you invest? What one investing principle has helped you the most?


  1. For me it's been patience, investing over the long term rather than on get rich quick schemes. Also, diversify. I have a financial planner that manages the bulk of my finances. But, I would never put my entire portfolio under the control of one person. Lastly, don't invest in anything that you don't understand or that doesn't make common sense. About the riskiest/most complicated investment I ever made was in a REIT and I didn't put a huge portion of my portfolio into it.

  2. "...don't invest in anything that you don't understand or that doesn't make common sense."

    I totally agree with Brian on this! I'm not a risk taker, so I invest in companies with a strong record of fiscally responsible behavior. Slow and steady.


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