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Financial advisors telling clients to bet against recovery.

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mistertrickster Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 09:11 AM
Original message
Financial advisors telling clients to bet against recovery.
I met with my advisor a few weeks ago and he strongly urged me to take "3 percent of my portfolio" and invest in double shorting Treasury bonds. He thinks that inflation (because of Obama debt) is going to skyrocket.

So I talk to a trusted family member who invested with a completely different firm, and guess what, his people are telling him to take "3 percent of his portfolio" and invest in index options (short selling stocks because they are going to fall dramatically).

Essentially what these guys are telling their clients (us) is PANIC!

What's up with that?
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SharonAnn Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 09:13 AM
Response to Original message
1. I met with my financial advisor yesterday. I'm recently widowed and trying
to figure out what to do with his and my IRA accounts.

She suggested getting out of most of the market "stuff" right now and sitting out the next few months or so. She thinks there's going to be a "correction" soon and she knows that this is all the money I have to live on for the rest of my life. Along with Social Security, of course which looks like it will be my lifesaver unless the right-wing has its way.
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mistertrickster Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 09:22 AM
Response to Reply #1
2. I'm not buying it. I think these advisors believe their own propaganda.
Regulation is BAD (nevermind what happened with zero regulation). Debt is BAD (only when Obama incurs it apparently). Taxes on the rich are BAD (nevermind Clinton's economy after raising taxes).
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MidwestTransplant Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 10:46 AM
Response to Reply #1
5. A good adviser would tell you to take the vast majority of your money out of the market
if you have to live on it. The market is not a place where you should have anything that you know you will need spend within the next 5 years.
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DavidDvorkin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 09:29 AM
Response to Original message
3. What kind of advice were these advisors giving their clients during the Bush years?
Did they tell them to move their money to avoid the coming Bush crash? If not, then their ability to predict the future isn't very good.
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mistertrickster Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:49 PM
Response to Reply #3
7. Damn good point, Dave. nt
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Randomthought Donating Member (388 posts) Send PM | Profile | Ignore Tue Apr-20-10 09:33 AM
Response to Original message
4. I work for a investment firm.
I handle most of the research material that come into the office and that isn't what they are saying at all. In fact this morning I saw a piece from a very reputable research firm that said the indicators are that the recovery is happening very quickly.
I keep about 60 % of my personal money in US Government Securities but that is because I am close to retirement and need to minimize risk but I also have about 25% in some high risk high return mutual funds.
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mistertrickster Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:51 PM
Response to Reply #4
8. I haven't done the research you have, but I agree with your conclusion.
I just don't see any reason for inflation (especially with high unemployment) or plummeting stocks right now.
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dmallind Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 01:32 PM
Response to Original message
6. Short both Bond funds AND equities??
Doesn't that tell you what you need to know?
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mistertrickster Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-20-10 03:52 PM
Response to Reply #6
9. Heh, good point. I hadn't thought of that. nt.
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