The movie might have been referencing a few years ago, but I can say that even today we receive "cold calls" all the time. A couple from name houses wanted to talk to me about bonds in the fall, or switching my account so I could get in on the great IPO's, and finally I told them that they were wasting their time. Others only wanted to talk to my husband (you know, "don't pitch the bitch, women are too much of a problem".
My parents were aghast when I started investing in the stock market. They have story after story of folks that have been swindled, so they believe the stock market itself is a racket. "There is always a winner, and always a loser", and unfortunately the loser is too often the average retail investor.
The internet is NOT pervasive, and there are many more people that still rely on a broker to advise them (but it's not always to their best advantage.) My cleaning lady was telling that she was saving in a fund but hadn't seen any returns on it... only the money she keeps putting in. I looked up the fund (rate of return 8%, and load 5.5%), and I suggested she might want to get into something with no load and managed for higher returns, since she was only 30 she could be more aggressive. I suggested a couple of the Janus funds and gave her some magazines and fund prospectus. She talked to the broker and asked to be switched into something more 'aggressive', and he did but was only able to work with companies they had relationships with (load sharing?). When she talked to him, he said 'yeah, a lot of people are asking to move into other funds'. She wondered why he hadn't been looking out for her best interest.
I've suggested that she get a computer and begin learning about investing.. that so much information is available online. Retail investor ignorance is what gives brokers their edge. Until the internet is pervasive and more people do their own research and/or join investment clubs like AAII, they are broker bait.
So many people are still at the mercy of someone else's advise. And I thoroughly believe that the only person that's interested in your own financial well being is yourself. The more knowledge you have, the better off you'll be. |
