Bail Pull

Posted on Sunday, March 2, 2008 in supplies

Bail Pull
Is it legal for a broker to put a retired person in all agressive stock porfolio? At what point do you bail?

Granted the market is diving. We inherited the broker from my moms estate. The porfolio is well deserified, but way too agressive. I kept asking if this was wise and he kept saying its the only way to recoup $ and grow and I was safe. Yeh yeh..stupid me. Is it smart to even try to bail and pull what remains now and put it in an annuity and is just to be chalked up to ''bad'' advice.

Based on what you wrote here--"he kept saying its the only way to recoup $ and grow and I was safe...". Your broker seems to be taking on more risks in order to get better returns for your money. How can your money be safe when he is taking chances with it?

How is the performance of the portfolio under the broker's management been in the last three years? Five years? A drawdown of about 25% for any given year is acceptable in the industry, but may not be for you. If your portfolio has sufferend two drawdown years in a row, it's time to look for a different fund manager.

If you want to keep this fund manager, then make sure that your portfolio under their management be non-discretionary. This means that they cannot make buy and sell actions on your behalf/without your approval.

It's up to you if you want to close your account with that broker and take your losses.

Here's how my thought processes will go:
- if i keep the positions with this bloke-r, the value of the portfolio might, and will go down some more since the economy is still showing signs of weakness.
- if I close the positions, I am going to have to take some losses. Will there be enough capital left to invest in a different asset class? And in doing so, fire this broker.

Either way, you can see that you are in a losing position. If there's still enough capital left if you move your assets, then do so, asap. And fire the broker.

Talk to an independent financial advisor on what would be best for your situation. Also, when you look for a different broker, look for one that offers Pay for Performance. This means that the broker or fund manager will only get paid when your investments under their management makes money at the end of each period. Your broker should also be able to explain to you which steps to take in order to get a better return for your money in the coming months.

Hope this helps.
Jim http://jsforex.blogspot.com

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Century Hardware Orleans Cabinet Drawer Bail Pulls Matt Black 7-1/2"
USD 10.74

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