Stupid Investment Advice

[Ginger Yellow]

Stupid Investment Advice

I don't think so either. But it was what I was also taught at an investment course I took in 2001 when an investment banker from ING told us that the stock market always goes up 6% per year

I'd be very surprised if that's what you were told, because it's manifestly false. However, you were likely told that the long run average growth of the stock market is 6%.

Re: your graph, that's all very well, but it neglects a) the performance of other investments over the same time period, especially ones likely to be chosen ex ante, and b) dividends and reinvestment thereof.

A quick Google gives me compound total returns over the last ten years from the Nikkei 225 of, wouldn't you know it, 6.3% a year.I'm not saying people should have been rushing to invest in the Nikkei over the last couple of decades, but as a Japanese person, you'd still have been better off investing than not.

[WOM]

Stupid Investment Advice

There seems to be a general feeling that, based on one or two things (terrorists attacks, oil, change of government, retirees, war, people not signalling their lane changes properly, etc) the entire foundation of free-market capitalism is going to change dramatically and this is all going away and your investments will never grow.

For me, it comes down to asking myself whether I believe that - in say twenty years - do I believe people will still buy cars, drink Coke, visit Disney World, listen to music, shop at Home Depot, wear jeans, fly somewhere on vacation, do their banking, reshingle their roofs, etc etc, etc x 24. These are the fundamental underpinnings of the stock market in many ways.

And if I'm honest, I realize that many things will change in that 20 year window, but most of the 350+ million people in North America will keep living as we have, generally, for the past 75 or so years. And that that will be true in most first-world democracies, plus quite a few more countries that aren't quite there yet. If I believe all that - and I do - I see no reason to not invest based on a few isolated uncertainties.

[Bored Of Education]

Stupid Investment Advice

ursus arctos wrote: I'm intrigued by this scam that Bored appears to be falling into.

People in the UK just phone blokes up and refinance mortgages with no documentation?

No, there was the paperwork that I signed with the mortgage company. I will actually be interested to see whether his fee is mentioned on that although it is mentioned in the final paperwork. This is something separate to that. I didn't sign anything specifically with him. As I say, I expected him to be paid by the mortgage company as a commission but to then try and get money out of me is something else again.

[Ginger Yellow]

Stupid Investment Advice

Like I say, you should have been shown (or at least offered?) a key facts illustration. By law, that KFI must contain details of any fees to be charged to the borrower, directly or indirectly, and any commission paid by the lender to the adviser.

[Crusoe]

Stupid Investment Advice

Mine did. And I had no problem with being charged a fee directly - as far as I was concerned that was to pay the broker for the time and effort of locating a suitable mortgage. We took 3 years to buy a house, he wouldn't have received a fee from a lender until the end of that process.

[Bored Of Education]

Stupid Investment Advice

Hmm, the mortgage offer that we were faxed had mention of his feee from us as well as his fee from them. Although I didn't sign anything, I accepted this offer so morally I feel that I should especially as it included a £500 cashback to us.

[Ginger Yellow]

Stupid Investment Advice

I'm still a bit perplexed by your insistence you didn't sign anything, but if you accepted an offer which included and disclosed the fee, then you're not just morally but legally obliged to pay it.

[Bored Of Education]

Stupid Investment Advice

I signed all the Nationwide mortgage stuff but it was only the offer that had mentioned his fee from us. What confused me was that we hadn't received any paperwork from him. We had spotted the fee from them but not from us so our bad for not being more vigilant. You're right that, if we wanted to question it, we should have done it when the offer came in.

He ended up getting almost as much as the solicitors in the end.

[ursus arctos]

Stupid Investment Advice

This still sounds like a disclosure violation to me.

In other news, if one does choose to invest in individual stocks, you might want to print this out:

[Ginger Yellow]

Via Matt Levine, the world's worst pump and dump scam: guy gets paid by stock promoters to distribute free penny stock newsletter to tens of thousands of people. Does not in fact distribute said newsletter to very many people, but instead buys and sells the stocks himself to make it look like people he had distributed it to were trading.

[ursus arctos]

Pretty much what one would expect from a putz who was already under a consent decree for unrelated scamming.