Mainstream investment advice
In my research on why mainstream investment advice is so wrongheaded I recently came across this thoughtful article by Jeffrey Barefoot, JD, CPA, CFP, written in April 2010, on protecting clients’ assets in the current environment:
The World Turned Upside Down
Do you get the picture? What truly has been in the clients’ best interest for well over nine years has been to heavily allocate to gold and gold shares/mutual funds, and to limit US equities to speculative bear market rallies. The conservative portfolio of the 1990’s would have allocated no more than 5% to gold and would have had as much as 60% in US equities. The great reversal started in 2001. The conservative portfolio over the last nine years would have started with an allocation to the gold and mining shares sector in 2003 of 15%. The advisor would have increased that percentage each year that gold outperformed the S&P 500. Today, one year after the March 9, 2009 lows of the S&P 500, a conservative portfolio will have at least 25% to 30% weighted to this sector and no more than 5% to general US equities. This bull market in gold is not over. Given the clear evidence it seems the naysayers are not just wrong, they are doing a disservice to their clients.
Clients are people, not assets under management. They deserve to be protected from the destruction of their wealth by the financial recklessness of the Wall Street investment bankers, regulators, academicians and politicians that created this mess. It is clear that the Keynesian Economic Theory is not working and the Western Government’s fiat money system is leading us to ruin. Sovereign debt defaults are coming this way. If investment advisors do not conform their investment advisory business to the evidence and truly protect their clients, they will see the destruction of their clients’ wealth and they themselves will be out of the investment advisory business.