Re: Do Pro Poker Players Make Good Clients For A Financial Advisor?
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People who invest usually want to maximize their returns.
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Exactly why I recommend Vanguard. Studies have repeatedly shown that when you pay advisors or managers fees, you are more likely to trail the market than beat it. That's why I recommend index funds. An index fund with a .25% expense ratio is already 1-2% ahead of an active manager on Jan. 1 of each year. Some studies say it's enough edge to beat 95% of active money managers.
Now if you are a skilled investor and can make your own investment decisions, by all means go ahead. But just like poker, track your results so you don't fool yourself. I do my own investing and have a very satisfactory record for the last 5 years, but I also spend at least 4 hours a day on research. And if you must have active management there are a few active mutual funds with long term records of beating the indexes (I would demand at least 10 years and preferably 15-20 with the same manager). And I'm sure there are one or two financial advisors out there who won't rip you off with excessive or hidden fees. But I don't know how to find or vet one.
That's why my recommendation is if you are unsure about doing your own investing, go to vanguard (or some similar vendor of no-load index funds or ETFs). You won't beat the market, but you won't trail it either, and you can sleep safe knowing you're not getting ripped off. BTW, this is exactly what Warren Buffett recommends to investors as well.
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