SAN LUIS OBISPO, Calif. (MarketWatch) — Warning: 91% of America’s financial planners are pushing clients into riskier investments, according to a new Financial Planning Association study on “Alternative Investments.” Get it? In today’s highly volatile markets advisers appear to be running as scared as their clients, chasing risky returns.
Why? Likely these advisers can’t justify their fees, so they’re playing the alternatives market: “commodities, managed futures, hedge funds, and more.” Warning, that’s exactly the kind of investments that triggered the 2008 meltdown.
Don’t do it. Avoid playing in that short-term gambling casino. Listen to the long-term advice of a couple respected industry leaders: “Your money will double in 10 years,” said Vanguard founder Jack Bogle recently in a Wall Street Journal interview with Jason Zweig. He sees a solid 100% increase in the next decade on a modest 7% annual return. And no gambling on risky alternative investments, just a simple well-diversified portfolio of three to 11 low-cost index funds.
You’ll hear a similar message from NYU professor and financial historian Richard Sylla: “Better days lie ahead,” he tells the Journal’s E.S. Browning. Sylla analyzed the market from 1790 and concluded: “If past market patterns hold true, as they did in the last decade, stocks should bottom out during the next few years and begin a recovery.”