The Greatest Investment Myth Exposed: Why Modern Portfolio Theory Will NEVER Make You Rich

November 12, 2006 -

To determine if the person managing your $1,000,000 account is truly the expert you believe him or her to be, pick up the phone tomorrow and do this simple experiment. Do not give your financial consultant any advance notice to prepare any answers, but call him (or her) up and ask him what are the three best performing stocks in your portfolio. Then ask him what are some of your worst performing stocks. Then ask him what will be the best performing asset class for the next five years. And what will be the worst. And in what specific countries. And ask for detailed explanations for each answer that is given.

And get him to answer on the spot. Not in ten minutes. Or don’t let him tell you, “I’m in the middle of a meeting. Let me call you back and I’ll be happy to answer those questions.” Because if he was in a middle of a meeting, he wouldn’t have taken your call in the first place. That’s a stalling tactic. Read more …

2 comments November 12th, 2006