Financial Experts, Including Mellody Hobson, Continue Encouraging Investors to "Wait It Out." WRONG!!

Financial Experts, Including Mellody Hobson, Continue Encouraging Investors to "Wait It Out." WRONG!!

A few days ago, I was glancing through the January 2010 edition of Black Enterprise, a monthly magazine. An article authored by Mellody Hobson drew my attention because it covered something of great interest to me: people’s investments. The article is titled “Apocalypse Then: Lessons from the Crash.”

According to the bio that accompanied the article, Hobson is a big Kahuna, president of Chicago-based Ariel Investments and a regular contributor to ABC’s Good Morning America. (OK, the Kahuna part is not in the bio: that’s mine.)

Before I continue, let me reiterate that my goal with this blog is NOT to engage in personal attacks. Rather, my goal is to educate and equip you with proven, secure, common-sense tools so that you can actually break the inadvertent poverty cycle that seems to plaque the majority of retirees, many of whom continue to fall prey to financial advice and guidance that amounts to little more than myths.

Back to the article. Hobson concludes her piece with the following:

Many of you might be mentally pushing back: Sure, Mellody, but how did you know when the market would push back? I didn’t. Nobody did. With investing, the great thing is, you don’t have to know exactly when things will turn. You just have to have the time and patience to wait.

Eloquent and cute, isn’t it? And doesn’t it sound all too familiar to you? That’s because this is the message just about every so-called financial expert has been telling the scores of worried investors whose retirements have either been delayed or completely destroyed by the recent turmoil in the stock market: just have the patience to wait it out.

I Completely Agree with the First Part

Hobson is not completely wrong. In fact, she is spot on with her admission that nobody can predict the market’s exact movements. I have been writing and speaking that very message for years.

However, I Vehemently Disagree with the Second Part

Hobson loses credibility with her admonition that “just” having the time and patience to wait will solve the problem.

Follow Along with MY Explanation

We can’t predict when the market will – to borrow Hobson’s words – push back. But we can predict with 100% certainty that it will fluctuate – both up AND down. So why would you expose your serious cash, earmarked for your retirement or your kids’ college, directly to the market with no downside protection when, in fact, you don’t have to? Because there is a proven means by which you can make strong returns when the market is up and completely avoid losing any value when “the market pushes back.”

Many folks have worked hard, made sacrifices, and accumulated their retirement nest eggs over the past 25, 30, or even more years. Some of them are already in retirement, and some were planning to retire in 2008 or soon thereafter. However, due to the recent market setbacks – get this – in 2008 alone, millions of these individuals lost 20, 30, or even a greater percent of their entire life’s savings!

So, is Hobson really telling these folks to “just have the time and patience to wait”? And what exactly are they waiting for? Are they supposed to wait another 10 or 20 years before retiring? Or they are being asked to have the patience to deal with the fact that they may eventually be dead broke – if they aren’t already?

Try Common-Sense; It Always Works!

Here’s what I want to know: Do any of these gurus know that it is completely unnecessary for investors to lose even a dime of their investments’ values when the market “pushes back”? So why do they continue exposing people’s futures to what are really nothing more than unnecessary risks?

Any investor who followed the simple, proven, and common-sense strategy we teach and implement for our clients DID NOT lose even a penny during the recent stock market crash. Therefore, they do not need to have the patience and time to wait for their portfolios to rebound.

In fact, our investors actually made money at the exact same time that so many others’ retirements were delayed or destroyed, the result of which is that Hobson and all the other experts are now urging their followers to have the patience to wait it out.

My one-word answer to all the preachers of patience is, SERIOUSLY?!

My Very Real Challenge

I have been making the case for common sense for years now. In fact, I discussed this very issue in my August 3, 2009, blog post and this article on our website.

To you the investor: please, please, please stop falling for all that emotional nonsense when it comes to your money! Wake up soon so you can smell the coffee! And remember, your biological clock does not have the patience or time to wait; get sound advice today so that your nest egg can grow and reflect reality!

To Ms. Hobson and all the experts selling the patience and waiting game: please let me know where I am wrong.

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PS: We have only a few seats left for our workshop this Saturday – and, yes, I will be the speaker. Reserve your seat here or call (301) 949-4449.