August 2018

His Contract Will Not Protect You

By Ray Mullaney
Originally published in Senior Digest

Where is Ralph Nader?
Investors Need Him Badly!

When the market falls, your savings will fall (40% or more is likely) and your advisor will do nothing to protect you.

The problem is: HIS investment contract is written to protect HIM, not YOU!

We can help you change that.

First, you need to know: how safe or risky are your investments? A steel bridge is safer than a wooden bridge, foot surgery is safer than back surgery, a car is safer than a motorcycle and a government bond is safer than a junk bond. But how do you compare the risks and safety of your individual investments and mutual funds?

Does HIS investment advisory contact clearly define the characteristics of and the differences between “safer” and “riskier” investments? Does HIS contract explain, in common language, what a risky investment is? Does HIS contract define “over-valuation’ which is one of the greatest causes of investment losses? Does it spell out how they plan to protect your assets before (or during) a crash? If it does not, why not?

Does HIS contract allow you to select how much of your money is invested in “safer” stocks and how much goes into “riskier” stocks? If it does not, how could you possibly know how safe or risky your portfolio is?

If your investment advisor has specific methods, metrics and disciplines that he uses to define risk and safety, I assure you, he would be boasting of them all day long. Are the words “riskier investments” and “safer investments” ever even mentioned in the contract? Why do you think the contract doesn’t describe or even mention the most important element of your investment plan – how safe the plan is? Shouldn’t the safety of your plan be the primary, most important consideration of YOUR plan?

I cannot over-emphasize this fact: If your financial advisor does not define and distinguish between what constitutes a “safer” stock from a “riskier” stock, how do you know that he knows the difference? Why doesn’t the contract spell out how much risk he is allowed to take with your life savings? If you had YOUR lawyer write the contract, wouldn’t it be written to protect you? Wouldn’t it spell out how much risk you’re willing to allow him to take with YOUR MONEY? Shouldn’t you KNOW how much risk he is taking with your money before you sign the contract?

Does HIS contract spell out HOW he will protect your money from a major market crash? If the most important element of your investment plan is how safe it is, why doesn’t the contract spell that out? If it doesn’t, maybe that’s because he has no plan to protect you from a crash. Why not? Isn’t protecting your assets from a crash, protecting you from losing 50% of your life savings, a vital part of every retirement protection plan?

HIS contract basically says, “if your account falls 50% or more, too bad”. YOU need a better contract.

At Capital Preservation Trust, we encourage you to work with an attorney and create an individualized investment management agreement, one that protects you! Your advisor’s contract protects him, not you. Shouldn’t you consider a better contract, before you need it most?

Our first obligation is NOT to invest your money, it is to PROTECT your money.

For a free – no-obligation stock or full portfolio risk evaluation contact Ray Mullaney at 401-450-4040.