ARBITRATION AWARDS FOUND ARBITRARY

A recent study reported that while investors win somewhere between 40% to 60% of customer cases, larger claims against the largest brokerage firms like Merrill Lynch and Morgan Stanley Smith Barney result in recoveries that are a small percentage of the amount claimed.       The 10 year study was compiled by attorney Daniel Solin and […]

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ATTENTION STRUCTURED CD INVESTORS

Did you know that structured CD’s [certificates of deposit] are extremely complex products? A recent study indicated that on average, investors received only approximately94 cents of value for each dollar invested in structured CD’s![1] Structured CD investors are told that they can gain access to the markets while reducing their exposure to market risk. However, […]

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ATTENTION INVESTORS: BEWARE OF NON-TRADED REITS

A recent study by SLCG concludes that non-traded REIT’s [Real Estate Investment Trusts] should not have been sold to almost any investor. This is due to the following factors:       Non-traded REIT’s charged more than $15 billion in up-front fees;       Non-traded REIT’s are fraught with conflicts of interest;       Sponsors pay corrupting upfront fees and commissions of […]

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ONLINE TRADING: IT’S NOT FOR EVERYONE

No less than the Chairman of the SEC has indicated, changes in the cost and ease of trading stocks should not lull investors into a false sense of security or encourage them to trade too quickly or too often.  He also recommended the use of limit orders rather than market orders when submitting a trade […]

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MARKETS, VOLATILITY AND MARGIN

Recent volatility in the markets shouldn’t cause most investors to question the benefits of long term investment in a diversified portfolio.  Bradley Skolnik, former Indiana Securities Commissioner and former president of the North American Securities Administrators Association indicated that, “Market gyrations like we’ve seen lately are more troublesome for traders than for investors.  Day traders […]

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DANGERS OF EARLY WITHDRAWALS

A Business Week article recently described predators that prey on early retirees. Many retirees and pre-retirees are woefully unprepared for the shift from “wealth accumulation,” or saving and investing, to “wealth distribution,” or drawing down those assets throughout their golden years. If the Me Generation isn’t careful, it could become the Poor-Me Generation. Over the […]

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WHERE ARE THE CUSTOMER’S YACHTS?

“An out of town visitor was being shown the wonders of the New York financial district.  At the Battery, one of the guides indicated some handsome ships at anchor.  He said, ‘Look, those are the bankers’ and brokers’ yachts.’  ‘Where are the customer’s yachts?’  asked the naïve visitor.”       In 1940, Fred Schwed, Jr. published […]

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HOW TO TELL AN ADVISOR FROM A SALESMAN

The fastest growing channel in financial services these days are those advisors who operate both as registered investment advisors and as affiliates of licensed broker-dealers.   Advisors who are dually registered may (in theory) sell both fee-based advice and commission-based products.   This conflict has brought renewed attention to the ‘fiduciary’ standard as compared to the standard […]

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INVESTMENT ADVISORY AGREEMENTS – WHAT TO LOOK OUT FOR

What Are Investment Advisory Agreements? An investment advisory agreement outlines the legal relationship between a financial advisor and a client. There are two kinds of advisory agreements: discretionary and non-discretionary. Discretionary agreements allow financial advisors to make decisions on the client’s behalf. Non-discretionary agreements require the client to okay decisions before they are made. Clients […]

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WHY OVER-CONCENTRATION IN THE OIL & GAS SECTOR IS IMPROPER

Maintaining a diverse portfolio is one of the most basic principles of prudent investing. Unfortunately, when the oil and gas sectors were booming in recent years, many unscrupulous advisers encouraged an over-concentration of investments in this one area. Eventually, those sectors went into decline, and investors experienced out-sized losses exactly because of this. This was […]

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