Remember when your parents told you to think for yourself and avoid giving in to peer pressure?
Yet, when we reach adulthood, this sage advice is forgotten as we follow the herd when it comes to managing our retirement money. We listen to the loud voices of Wall Street screaming, “We manage everyone’s money and we should manage yours!”
This incessant message is blaring in TV and radio commercials, ever-present in newspaper and magazine advertisements and delivered to homes daily via direct mail. There is no escaping these messages: “The market always comes back”; “don’t sell now, you’ll miss the rally”; “selling at low prices turns a paper loss into a real one.”
Wall Street has convinced the investing public that the “herd mentality” is OK when it comes to where to keep your retirement money. How can everyone be wrong?
The facts are: (a) money managers generally underperform the market averages; (b) expenses and fees are not transparent; (c) risk is often relegated to the fine print or legalese of the voluminous prospectus; (d) diversification does not work when the market nosedives, as it has twice since 2000.
The peer pressure is evident from cocktail talk such as “who manages your money?” and “what investments are you in?” – and the company coffee klatch-question, “which 401(k) choices did you make?”
The result ... off to the market we go, just as cows follow the herd to the slaughterhouse.
Is there more we need to know?
A new book by Tony Walker titled “Don’t Follow the Herd” is a frontal assault on why you need to break free of the financial world of Wall Street and take charge of your money.
Walker is a registered investment adviser with years of experience in dealing with Wall Street and the financial world.
“Don’t Follow the Herd” is about farmer Brown and financial adviser Wally who find they have a lot in common.
The farmer bangs on the feed bucket to get the cows to follow him onto the truck headed for the slaughterhouse, and Wally bangs out the Wall Street message so clients will join his herd.
Wally learns from farmer Brown that the “herd mentality” works on people just as it does cows, and the final destination of the two is often the same: The slaughterhouse. In the end, Wally learns a very valuable lesson about people and life that the author shares with the readers.
Walker’s clever little book – a short read of less than an hour – clearly shows readers the dangers of following the herd mentality. Even after two massive market meltdowns in the past 10 years, many retirees, or soon-to-be retirees, continue to blindly follow the advice of Wall Street as if in a hypnotic trance.
If you’re one of them, Walker’s common-sense, down-to-earth message in “Don’t Follow the Herd” will raise some very interesting questions for you to ponder.
This thought-provoking book gives a Main Street view from an investment adviser schooled in the ways of Wall Street.
Walker goes on to tell the reader about the seven costly mistakes people make with their money and how these can be avoided. The message is crystal clear: Drinking downstream from the rest of the herd and blindly doing what everyone else is doing may be a path leading to financial danger.
The book is fun to read and presents an easy-to-understand approach to money and life.
This little book will help you with your retirement decisions.
For the record, I profit in no way from the sale of this book.
The book is about taking charge of your financial life and breaking away from the herd.
It paints in colorful details the pitfalls that Wall Street would prefer you not know.
The book is non-technical and written for those who need to know more about their money and how to keep it safe.
Even the most jaded readers will come away with their eyes wide open about how risk, fees and unsuitable choices can ruin retirement.
Shelby J. Smith’s monthly Consumer Insights column is published with permission through DJ Dipko Financial Services, Windber.