Choking or Investing: Someone Has To Know Exactly What They Are Doing

Choking or Investing: Someone Has To Know Exactly What They Are Doing

by: Brendan Magee

There is nothing as frightening as sitting down for a meal when all of a sudden someone starts choking on a piece of food. The person's face turns bright red and they are struggling for air. Such a situation happened to a gentleman I was sitting with and oddly enough I had gone through a little training in the Heimlich Maneuver a few months ago.

Problem was, he wasn't choking on a piece of food. He was having an acid reflux attack and administering the Heimlich would have done the man more harm than good. Fortunately, his sister was there and she was a nurse and familiar with his condition. She instantly knew what to do to help her brother.

Honestly, of forty to fifty people in the room, all with the best of intentions, there was one person who had the qualifications to help him. The rest would have been creating more problems for the man.

As I drove home, I thought about all the people who are seeking good advice with their investments, but who are not in the position to determine if the people they are seeking the help of are truly qualified to help. No doubt the majority of investment professionals are sincerely out there to help people, but are they truly qualified?

Truth be told, some twenty five years ago, I  was not in a position to help people make good investment decisions. That didn't stop me though. I had a great mutual fund manager who was producing great returns and all I had to do was get people's money to him and everyone would be happy. Right?

What I didn't realize is that what a mutual fund manager did in the past had nothing to do with what he or she would produce in the future. Oops! Double oops!! Track records are what people are still given to validate their investment decisions. 

So how does an investor protect themselves from well meaning, yet unqualified investment professionals as well as well meaning friends and family offering heart felt advice? The answer lies in knowing the questions to ask. This also works when the unqualified person is the investor themselves.

The question to ask the investment professional is, "Can you tell me the academically proven rules that need to be followed in order to produce successful long-term investment results?" If there is anything less than a short concise answer coming from that adviser's mouth that should be a warning sign that you are not dealing with someone who is qualified to help you.

The question to ask of yourself if you are considering managing your own investments is, "When it comes to building an investment portfolio, do you know exactly what you are doing and why?" Be honest with yourself here. If your answer is any thing less than a 100% yes, do yourself a huge favor and get rid of the notion of managing your own money. It may hurt your pride a little, but that pain will only last a little while. Better that pain than the irreperable damage that can come from misinformed investment decisions.

Today, my uncle is enjoying a great life rather than lying in a hospital bed (or worse) having to undo the damage I could have done in applying the Heimlich, and as an investor you will get a lot more enjoyment and peace from your money if the people who are truly qualified to do so are helping you to make your investment decisions.

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322.