On February of 1637, the era of the Dutch Golden Age, the world recorded one of its first experiences with speculative bubbles. This is widely known in finance circles as 'tulip mania.' The specifics and accuracy about the Tulip craze are debated among academics. What we know is that at one point, people were paying a lot for tulips and seemingly overnight the prices of tulips imploded. Regardless of the specifics, the Tulip Craze has become a symbol of the phenomena of price collapse within markets.
With the recent run-up in Bitcoin prices, one can't help but wonder if we will experience a similar price collapse in Bitcoin. This weekend the price of a Bitcoin passed the $4,000 mark, a staggering 300 fold increase over the last five years. Bitcoin is the most widely used cryptocurrency, but is one of hundreds that are now becoming available. The question we are all asking in finance circles is, will Bitcoin become the next bubble or is it here to stay? One thing is for sure, cryptocurrencies are the way of the future, the question is which one will last...will Bitcoin become the AOL of the internet boom or the Google?
When working with an advisor, they get paid to do their job...the issue with fees is that they are often not disclosed or buried deep in the statements somewhere never to be found or understood. As a general rule...there are always three fees involved when working with an advisor, they are:
Financial decisions are some of the most important decisions we all make in our lives. Unfortunately, navigating the landscape of financial 'advisors' is difficult. I use the quote marks when I say advisors because most 'advisors' are nothing more than glorified sales professionals. One easy way to figure out if the 'advisor' you're working with is a sales person or a fiduciary, is to ask them what their licensing is. If the 'advisor' you're working with has their Series 7 license, you are likely speaking with a sales person.
Ideally, your investment professional is a Fee-only advisor and upholds the fiduciary standard on ALL aspects of their relationship with you. Currently the law only mandates that advisors work in the best interest of their clients when working with retirement assets. The good news is that there are other options. Some independent financial planners have specifically aligned themselves with a core set of principles that ensure the client's best interest comes first. Typically, a Certified Financial Planner TM designee will uphold the fiduciary standard, which mandates that the advisor works in the best interest of the client. Be careful who you work with, because it matters.
Wall Street loves to make investing complex, but it doesn't need to be. I love the book The Investment Answer by Daniel C. Goldie and Gordon Murray. The authors break the investment process down into five key decisions that all investors need to make, they are: