Listen To Ray Didinger When It Comes To Football, Not Investing

Listen To Ray Didinger When It Comes To Football, Not Investing

                                by: Brendan Magee

There isn't a more respected journalist in Philadelphia then Ray Didininger. Eagles fan want to listen him after every game. They don't just put anyone in The Pro Football Hall of Fame and he is in there because of the tremendous work he has done over the last 40 to 50 years. 

That is why I was so disappointed to hear him endorsing an investment program that has been academically proven to be wasteful. I am listening, as usual, to the local sports station and that's when I hear Ray sell out investors. He is endorsing a program that is going to teach people how to trade stocks like a Wall Street Pro. This program will teach you when to buy stocks, when to sell them, how to spot trends and know how to take advantage of them, basically no matter what is happening in the stock market you will learn how to profit from it. 

Now let's step back for a minute and imagine that Ray was endorsing a program that would "safely" teach aspiring athletes  how to use performance enhancing drugs/steroids. Not only that, let's say he was endorsing a program that would also teach aspiring athletes how to get past any drug tests they may be required to take in order to be eligible to participate in the upcoming season? Given all we know about the dangers of taking these kinds of drugs, how many of us would turn a blind eye to a man trying to get people or our children to engage in behavior that we know is destructive? 

That is exactly what he is doing by endorsing this on-line training academy's program. In 1990 The American Law Institute's Prudent Investor Law stated, "Forecasting in an attempt to separate the winners from the losers is deemed wasteful." Forecasting, speculation, and gambling are exactly the behaviors people are engaged in when they are stock picking. Not only do they take on the risk of gambling, they also engage in the added risk of owning individual stocks. Ever heard of Enron, Bear Stearns?

Now Ray is a very trusted individual. He has earned that trust over many years of integrity filled journalism. It would be very easy for any of the millions of people living in Philadelphia, based on his endorsement, enrolling in this trading program and start gambling and speculating with money they are going to need in retirement. 

The irony here is that more often than not if someone asks Ray on the radio who he likes in the upcoming Eagle's game or has a question about their fantasy league team, he immediately discourages the fan from using the information he is giving to go out and gamble on the Eagles or their fantasy team. He doesn't want to be responsible for them losing any money. I have no reason to doubt the man's sincerity over wagering on football games. It's just that when it comes to investing their life savings, he is encouraging investors to engage in the same kind of behavior. Why Ray?

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.

Gold Doesn't Fuel Your American Dream

Gold Doesn't Fuel Your American Dream, Cash Does!!

                 by: Brendan Magee


I got a couple of calls the other day. One client is getting ready to take a trip over seas. One client needs a couple of dollars to pay the taxes on her beach house. The trip and the beach house are significant parts of both these ladies' dreams. One is a devout woman of faith and she is taking a trip to the Holy Land. The other lady has had the beach house in her family for more then 50 years. Her children, her children's children, and her great grandchildren have spent a significant part of their lives at that house. The taxes and the air fare both need to be paid in cash, nothing else will be taken for payment.

This may seem like a bit of an oversimplification, but I recently received an e mail asking me if I would like to attend a seminar where I would learn about the benefits of investing gold. I would learn about how gold will perform when inflation, interest rates, and debt levels go up. Plus, I would learn how a trade war will affect the stock market. First and foremost, how do they stand their with a straight face and tell anyone they know how an investment will perform in the future? 



I ask myself, "Even if I know how gold will perform in the future and how a trade war is going to affect the stock market, "So what!" Like my two clients, I have dreams and things I want to do in life, but they can only be paid for in dollars. I cannot take a gold bar to the college my boys choose to attend and pay the tuition with a gold bar or certificate. They will want cash. The trip my wife and I want to take to Hawaii will require cash as well, not gold.

As an exercise, for a few minutes, write down all the things in life that you want to do, see, experience, or have. How many of them do not require cash to pay for? So one problem is I need  cash to fulfill on my dreams. The other problem is that gold has been a terrible long-term investment.

Historically, the long-term rate of return of gold is about even with T-bills. The amount of volatility is about equal with stocks. In fact, according to Longtermtrends over the past 100 years the S&;P 500 is up over 36,000 %, the Dow Jones is up over 31,000 % while gold is up only 6,568%. So as an investment, gold has me taking stock market risk but only getting T-bill returns. Not a recipe for investment success.

So yes, buy your wife that gold necklace or watch. She deserves it and will look great in it, but as far as investing and coming up with enough cash to fuel your American Dream you would be wise to stay away from gold.

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

One More Reason Why The American Is Dying

One More Reason The American Dream Is Dying

         by: Brendan Magee


As evidenced by a recent Fox News Poll, 88% of U.S. citizens believe that a secure retirement is a major part of the the American Dream. I think we would all like to believe that after a lifetime of hard work that we have the right to sit back and enjoy our golden years in relative comfort and security. 

The problem is that, routinely, investors are being talked into decisions and behaviors that are in complete conflict with financial security. I saw an article in Yahoo finance that does just that and thought I would point out the flaws, but at the same time show you how investors can easily get seduced into following this misguided advice. 

The article entitled "My 7 Must-Own Stocks to Build Up Your Retirement," does what a lot of investment articles and broadcasts do in that they give the illusion that the advice is prudent when in fact it turns an investor into an unsuspecting gambler and speculator. 

So let's start off with the "7 Must-Own Stocks." They are as follows U.P.S., Boeing,Visa, AbbVie, Jason Hall, Colgate Palmolive, and Westlake Chemicals. First and foremost, the article is posted on Yahoo Finance which tends to give the article a boost in credibility. Secondly, the article lists a few companies we are all familiar with. We see the U.P.S. trucks all the time as well as their commercials. We probably all brush our teeth with Colgate or use their mouth wash. With our level of trust going up, we tend to lower our guards and give the article more credit than it deserves. 

  The first question to be asked is, "How does the author, Lawrence Meyers, of Investor Place know what is going to happen in the future with any of these companies?" He goes into detail about why believes their stocks are good investments based on  information he has in hand, but what does any of that information have to do with what will happen in the future? The truth is  only unknowable and unpredictable information and how people around the world react to it is going to move the market. What do you think your odds are there?

What ever information he has will have nothing to do with what happens to these companies in the future, good or bad. So the investor who takes him up on his advice believes they are engaged in investing when in fact they are speculating and gambling with money intended for retirement, not the blackjack table. 

Secondly, one of the most critical components of successful long-term investing is diversification. It protects you from unforeseen future developments like 9/11, or a 2008 stock market crash. Ideally, by having your money spread out among multiple asset classes you are protected against the possibility of one asset class tanking. You also don't miss out on an asset class taking off and you missing the boom.

With this article's advice all the money invested in these companies is all in U.S. Stocks. Remember the 38 percent drop in U.S. Large Company Stocks in 2008? So not only would your money be invested in one country, it would be even less diversified by owning individual stocks. Unknowingly, the investor following this articles advice is taking way more risk than they are aware of without an increased expectation in returns. 

So the article seduces the investor into becoming a speculator and a gambler, and we all know the long-term expected profit of gambling and speculation. Then gets the investor to take on massive amounts of risk without any increase in the long-term expected rate of return. That is not a recipe for a secure retirement. It's recipe for working longer, retiring with far few resources to afford the kind of retirement you were hoping to live,  or not being able to retire at all. In either case, that is not what most people are looking forward to in retirement.

To protect themselves from this kind of advice, investors need to start asking themselves better questions. Questions like: How does the market really work? How does the market produce the returns it is generating? How do you spot the warning signs that someone is trying to talk you into gambling and speculating with your money rather than prudently investing it? Answering those two questions would put the investor in a far better position as far as knowing what should be done and not be done with their money? 

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

One Reason Why The American Dreeam Is Diing

One Reason The American Dream Is Diing