9 Things Wall Street Experts Won’t Tell You, But Should

August 24, 2015 2:14 pmViews: 238

Wall Street experts

Why is it that the so-called experts on Wall Street miss the crashes? Why is it that your broker keeps telling you to hold onto your money in the market and keep it there when you can tell you are losing your shirt?

I hate to be the bearer of bad news, but it is really hard to tell exactly what the market is going to do next and if any so-called expert tells you anything else, they are most likely, lying to you. No one knows what the market is going to do and most of their advice and predictions are pretty close to being bogus.

The truth is, most of the time, the Wall Street expert and even your broker doesn't have your best interests in mind, they are looking out for their most important person, themselves!

So, here are 9 things from Marketwatch that Wall Street’s so-called experts won’t tell you, but they most definitely should.

1. “Our investment forecasts are bogus.” - All those spreadsheets and charts telling you that stocks produce “average returns of 9% a year”? They’re based on completely faulty math. Yes, they use “historic data.” But they misuse the data.

2. “We only agree because we have to.” - Yes, every investment “expert” seems to parrot the same cheerful things as every other. But if you think that’s because they all independently reached the same conclusions, you’re dreaming. They have to agree.

3. “We don’t know anything about history.” - Wall Street experts like to cite historical data to validate their strategy and analysis. The problem? They actually know little about financial history, and understand even less. Most of their “historical data” come from the past few decades, an unprecedented era that will tell you completely different things about stocks, bonds and the economy.

4. “We’ve missed every crash.” - It is worth remembering that twice in the past 20 years, the U.S. stock market has fallen by about half. And on both occasions, most Wall Street “experts” were taken completely by surprise. They also failed to predict the housing bust — most of them, indeed, cited “history” to say that it couldn’t happen.

5. “Your wealth is not our No. 1 priority.” - I don’t mean to be cynical, but Wall Street’s top priority is not to protect your wealth. It’s to protect their own. That’s just human nature.

6. “Your balanced portfolio can fail.” - It is conventional wisdom on Wall Street that a “balanced portfolio” of stocks and bonds will protect you, because even if stocks go down, then bonds will go up. The problem? It’s not true.

7. “There is no ‘money on the sidelines’ to push the market higher.” - Wall Street experts are fond of saying that the stock market is bound to go higher shortly because there is so much “money on the sidelines, waiting to come into the market,” and that will drive up prices. But this is actually a total lie.

8. “The best investments are the ones we won’t tell you about.” - The biggest conspiracy on Wall Street is the one hiding in plain sight. The best long-term investments must, by definition, be those that are cheapest in relation to their fundamental worth.

9. “Another crisis is just around the corner.” If you missed the last big buying opportunity, don’t panic — another one will probably come along shortly. Wall Street likes to pretend that today’s modern economy, with its MBAs and CFAs, PhDs and other experts, has pretty much relegated financial turmoil and chaos to the bad old days. But it’s untrue.

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