So, just to surprise y’all, a personal finance post this time.

So you’ve worked hard and saved money, or, say, have had a big jewish wedding and have gotten some nice dosh to stash away, starting your joined long-term savings strategy. What do you do?

One one hand, we have investment houses and mutual funds – they’ll take your money, wisely invest it in a well-diversified portfolio. And, of course, the former will tell you that the market always goes up in the end and that you should buy and hold for the long term. The latter will tell you nothing – it’s your call and you’ll have to make the analysis yourself. Do you really read the market well enough?

So buy and hold. ..then, of course, the market crashes once or twice in a decade and you end up with negative returns. Fine if you’re young and working, not fine if your retirement plan just went up in smoke.

These investment managers will not tell you the indicators are looking negative, the market is ridiculously overbought and that you should play it safe and go to cash. No, because their bonuses are tied to their asset portfolio, and that is connected to all the little lemmings keeping their hard earned cash in the market.

stocks


On the other hand, you have online stock brokers, where you can do all the work yourself – either keep close tabs on the market, trade as you like, assess the risks yourself, and win or lose on your own. But who outside the financial industry, holding a normal day job, has the time?

So what are the other options? You can pay a subscription fee to online services who purport to keeping track of the market for you and giving you a easy-to-digest summary of what is going on.  On a sizable portfolio, this may be a good idea – however you will still have to do all the work, and buying and selling (especially on short term trades) takes time.

You could find a good forum or blog which gives market analysis and tips, and there are a lot of them – but there’s no accountability and you can’t really trust anyone!

Or, perhaps, you just happen to be lucky enough to know an investment manager who you can really trust to tell you the truth and not be negatively incentivized, and thus perversely on the constant edge of shafting you out of your money. Not many of these out there I would imagine. And they probably will charge you a hefty fee or percentage.

So what’s the solution? Is there a reasonable-cost investment manager who will tell you when to be in the market and when to get the hell out? One who will really look after their clients and not their bonus?

Please do tell me if you know the solution – is there a third way?