FEAR JAR
WHERE THE MIND IS WITHOUT FEAR
If you have come this far, then the chances are that you know the basics of investing - at least on paper.
You know the pitfalls to avoid and the mental makeup that is required to perform well in this environment.
Fear of the unknown will always be there - after all, no one really knows what the market is going to do a day, a week or a year from now.
If you are able to ignore the fear to an extent that it does not impede with your free will, great results await you.
Everyday I hope to do "something foolish, something creative, something generous" - Benjamin Graham
VIX - THE FEAR GAUGE
Most people will correlate volatility and fear.
There is even an index called VIX that tracks volatility.
It is referred to as the "Fear Index"
The more dramatic the price swings are in the index, the higher the level of volatility, and vice versa
While it may be fun to follow the VIX, it is best to not pay too much attention to these kinds of data.
PAID FINANCIAL ADVICE
Financial advice is big business and almost all investment houses will be happy to advise you for a small fee...sometimes not very small.
While it is beneficial for some who have large estates, Inheritance Tax worries, trust funds and significant amount of capital invested, for the vast majority of novice investors it is not required.
Advice can be expensive and the cost-benefit of such an action is sometimes quite murky. For sure advisers will have strong knowledge of the market and will understand the risk appetite of their clients thereby directing investments that are most appropriate.
There is a fiduciary responsibility of Advisors that means there should not be any conflict of interest - this is sometimes not the case.
We advice novice investors to learn and take investment decisions on their own. It may be a cheaper, safer and a more lucrative option.
SIN OF COMMISSION
Some Financial Advisors will prey on the fears and hopes of clients and may direct them to investments that are wholly inappropriate for the investor.
For example, St James's Place (SJP) charge an initial 4.5% of the invested amount and then a further 0.5% ongoing charge - that is 5% going in non-value added fees. It is a waste.
The new US Fund from Hargreaves Lansdown has an average annual charge of 1.48% - we consider it eye-wateringly high.
The fund being peddled must generate all the more return just to recover from the damage caused by fees.
Unfortunately, firms like SJP are widespread so most retail investors are better off staying far away from these organisations.
FINAL WORDS
All investors are strongly recommended to learn as much as they can about investing.
There are lots of free, high quality resources on the Internet that explain the process and choices.
Visitors to JarInv are actively encouraged to build upon each and every statement of this site.
The more knowledgeable we are, the more difficult it is for some smooth operator to take advantage of us.
While we are here to help - not everyone has quite the same objectives. One view of the companies listed here should be sufficient to prove this point.