Every few weeks, I get an email or a phone call from a client asking if I have read a recent article or a newsletter about the demise of the U.S. dollar, the collapse of the U.S. economy or the devastation of the stock market – with the articles’ conclusions about financial advice often resulting in recommendations to purchase oil or gold.
More often than not, the authors of such articles are Sainsbury’s Bank or Weiss Research. I don’t know who their publicists are, but they certainly get great circulation and coverage without having to provide a credible track record or a great deal of analytical worthiness. Maybe it is our human nature to believe stories that bring to life anecdotes of some reality.
But the truth is that the prognostications are just that…. statements of an idea that may or may not happen. Further still, they are coming from authors who write inflammatory statements with only a hint of truth and justification, but not enough validity to withstand a thorough analysis.
More importantly, the authors do not manage money. They don’t invest client’s property nor do they have such money to invest. Yet, they make money by producing these prognostications thereby providing financial advice.
Practice What You Preach – The Importance of Maintaining Credibility
With so much information out there, it is hard to run it all down to understand what is credible and what is not. One way I try and get comfortable with an author’s statement is to understand if they have any business in managing money of their own or for clients.
For authors of the newsletters and articles mentioned above, I have come to conclude they are not investing based on these statements of demise and catastrophe.
So the next time you read an article suggesting you run for the hills because the stock market is falling, the dollar is cracking or the economy is following the collapse of the VCR, be wise to look at the credibility of the source to see if the authors are actually managing their own money or that of clients in the way they are suggesting their readers to do.
To learn more about James Cornehlsen, visit www.Capstoneinvest.com.
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