Jeff Louderback's Write Perceptions

Three Simple Strategies for Investing Success

Just like playing the lottery or dropping a quarter in a slot machine, investing is not a sure thing. Though most of the financial world likes to pretend that investment decisions are purely based on logic and rational thought, the truth is that the majority of these investment choices are driven by emotional and psychological factors, Dr. Joshua Helman believes.

 

A Harvard-trained M.D. who is also a CFS (Certified Fund Specialist), Helman learned first-hand that traditional brokerages are not interested in providing their clients with sound, academically-based advice. He put his medical career on hold and accepted a position with a prominent Wall Street financial institution with the intent to learn about the ins and outs of investing so he could help his friends and colleagues. Instead, he discovered that the institution’s primary goal was not to offer “sound, academically-based advice” but to sell its own products without concern for the clients’ best interest.

 

This is why Helman divorced himself from these traditional financial institutions andcreated the Institute for Healthy Investing, which is based in the Orlando suburb of Lake Mary. Helman is aligned with Abundance Technologies, an investment firm that was founded and is operated by Mark Matson. Abundance manages $1.7 billion and uses the Nobel Prize-winning research of Merton Miller, Harry Markowitz, and William Sharpe, and the groundbreaking research of Eugene Fama and Kenneth French from the University of Chicago. . Their philosophy is based on the Free Market Portfolio Theory investment approach, which emphasizes academic principles in investing.

In his “Investor Awareness Guide,” Helman offers readers these Three Simple Strategies for Investing Success:

 

Eliminate Speculating and Gambling in Your Portfolio

 

Anytime you pay a fee or a commission to managers for picking stocks they believe will beat the market, you are gambling that those stocks are the winners and that others are the losers. The first strategy for investing success is to stop this self-destructive behavior.

 

Compare investing to dieting. It is important to eat the right kinds of food, but it is also crucial to stop consuming massive portions of cakes, cookies and ice cream. Success with your diet involves a lifestyle change.  You must identify healthy and empowering foods and activities, and start consistently incorporating them into your life while recognizing destructive behaviors and eliminating them. Investing works the same way. To have success, you should eliminate speculating and gambling with your money via stock picking, market timing and track record investing.

 

A Dalbar study determined that, over a 22-year period from 1984-2005, the S&P averaged 15.67 percent. The typical investor, placing his money in mutual funds trying to beat the S&P, made a meager 4.12 percent over the same 22-year period. These investors believed in a fund manager’s performance and mutual funds that had seen a profitable five or 10-year period, thinking that it was that fund manager’s superior ability which generated the returns. Instead, it was the underlying asset category that accounted for the results. Investors are often unaware that they could lose 20 to 50 percent of their money. After massive losses, panic spurred them to sell the funds and invest in other assets that were up, repeating the destructive cycle.

 

Every time this cycle occurs, it produces more profits and commissions for the brokerage firms. Whether you win or lose, the brokerage takes its cut. Thus it is important to eliminate stock picking, market timing and track-record investing from your investment strategy.

 

Use market forces; don’t fight them

 

Don’t fight market forces by attempting to beat the market because a majority of managers do not achieve market returns. Instead, harness the power of free markets by owning structured market portfolios that are designed to deliver market rates of return. These funds buy a cross section of all the stocks in a given asset category and often employ effective trading strategies to minimize trading costs to the portfolio.

 

Many investors are surprised to learn how generous market rates of return have been over long periods of time, and there is no stock picking or market timing required to achieve results. Research indicates that the average active mutual fund underperforms the market by two or three percent each year. If the market has historically earned double-digit rates of return and the average investor has seen just 2.6 percent, this means that the investor’s behavior accounts for about a 10 percent annual loss.

 

Based on this knowledge, you only need to allocate your assets into various asset categories to achieve market returns and remain disciplined over long periods of time. Of course, that is easier said than done, thus the value of a financial coach. By focusing on market returns, there is no stock picking involved, and no gambling on beating the market. You own as many stocks as possible in a respective asset category.

 

Hire a financial coach

 

Just as you would hire a coach to improve your golf swing or tennis game, you can turn to a financial coach to maximize the benefits you receive from your investment strategy.

A coach can help you make prudent decisions about how much volatility and risk you want to incorporate in your portfolio. The coach helps you learn the difference between a prudent and imprudent risk. A good coach also provides you with guidance about understanding and measuring diversification in your portfolio.

 

Traditional commission-driven financial planning often leads to fear, anxiety and confusion for consumers. Brokers do not explain all of the options, just the ones that involve the products their financial institutions sell. A financial coach helps you wade through the complex issues and maintain long-term discipline in the investing process because, ultimately, investing roadblocks are caused by people, not portfolios.

 

Importantly, a financial coach will make independent recommendations – not based on commissions, but focused on what is in your best interest.

For more information about Dr. Joshua Helman and the Institute for Healthy Investing, visit www.freemarketinvestor.com.

 

 

“Navigating the Fog of Investing” is a film that exposes the conspiring minds of brokerages

Few topics are more confusing than investing. Consumers are bombarded by television commercials and slick magazine advertisements from big-name brokerages. In the wake of dwindling portfolios caused by a major recession and Ponzi-scheming financial advisors, it is more difficult than ever to know who to trust.

 

“Navigating the Fog of Investing” exposes the conspiring minds of the brokerage community and their tawdry ways, Dr. Joshua Helman says. Armed with a hidden camera, Helman and associates reveal stock brokers and investment gurus for what they really are -- financial cheerleaders without the skirts. The movie is to the personal finance industry what Michael Moore's “Sicko” film is to the healthcare industry.

 

A Harvard-trained M.D., Helman is the ideal person to spearhead the movie. Discussions with his father, also a physician, and his father’s colleagues led Helman to enter the financial coaching arena. He learned that physicians were typically pushed into high-risk investments that netted little return but generous commissions for the financial institutions. Helman put his medical career on hold and accepted a position with a prominent Wall Street financial institution with the intent to learn about the ins and outs of investing, so he could help his friends and colleagues. Instead, he discovered that the institution’s primary goal was not to offer “sound, academically-based advice” but to sell its own products without concern for the clients’ best interest.

 

He left the company and started the Institute for Healthy Investing, which is based in the Orlando suburb of Lake Mary. Helman is aligned with Abundance Technologies, an investment firm that was founded and is operated by Mark Matson. Abundance manages $1.7 billion and uses the Nobel Prize-winning research of Merton Miller, Harry Markowitz, and William Sharpe, and the groundbreaking research of Eugene Fama and Kenneth French from the University of Chicago. Abundance's philosophy is based on the Free Market Portfolio Theory investment approach, which emphasizes academic principles in investing.

 

Throughout “Navigating the Fog of Investing,” Helman asks viewers “to get real” about separating the truths and myths of Wall Street. He appears periodically, along with a number of seriously heavy hitters, from Nobel laureate Markowitz to former Chairman of the U.S. Securities and Exchange Commission Arthur Levitt, who reinforce Helman's argument that in truth there is no such thing as a broker who can predict how the market will perform.

 

From ads by the financial institutions that have little or nothing to do about their business to financial news programs on television, much of today’s world of investing is more about entertainment than helping Americans build wealth. In one part of the film, viewers learn that Susan Krakower, producer of the Jim Cramer juggernaut Mad Money, used to produce The Jerry Springer Show.

 

For more information about “Navigating the Fog of Investing,” visit www.investingfog.com.

Institute for Healthy Investing shows consumers why traditional brokerages don’t have your best interests in mind

Dr. Joshua Helman is no friend to brokerages that promote traditional investment strategies. He doesn’t want to be, and he thinks that you shouldn’t either since they are more interested in their bottom line than yours. Helman believes in evidence-based science, whether he is using it as an emergency medicine physician or a financial coach.

An incurable entrepreneur, Helman is a Harvard-trained M.D. who is also a CFS (Certified Fund Specialist). All it takes to understand his investment philosophy is a glance at the documentary he created, “Navigating the Fog of Investing: A Scathing Rebuke of the Financial Industry and its Marketing Machine,” and the book he co-authored, “The Dirty, Filthy Lies My Broker Taught Me and 101 Truths About Money and Investing.” His company, the Institute for Healthy Investing, emphasizes evidence-based investing.

Helman has impressive credentials as a physician. He completed his undergraduate work and medical school at Harvard University and earned a master’s degree in biochemistry at the University of Cambridge in England. He trained at Duke University Medical School and the University of Michigan, has served as a practicing physician since 1993 and is now an attending emergency medicine physician in the Orlando area.

Discussions with his father, who is also a physician, and his father’s colleagues led Helman to entering the financial coaching arena.

“Physicians, like most high income earners, are seen as targets by financial institutions,” Helman explained. “I heard my father and his colleagues talk about how it was difficult to retire, and I wondered why since physicians are high-income earners. The more I listened, the more I learned that they were receiving poor advice from their financial advisors. They were pushed into high-risk investments that netted little return but generous commissions for the financial institutions.”

This led Helman to put his medical career on hold and accept a position with a prominent Wall Street financial institution with the intent to learn about the ins and outs of investing so he could help his friends and colleagues. Instead, he discovered that the institution’s primary goal was not to offer “sound, academically-based advice” but to sell its own products without concern for their clients’ best interest.

He left the company and started the Institute for Healthy Investing, which is based in the Orlando suburb of Lake Mary . Helman is aligned with Abundance Technologies, an investment firm that was founded and is operated by Mark Matson and manages $1.7 billion and uses the Nobel Prize-winning research of Merton Miller, Harry Markowitz, and William Sharpe, and the groundbreaking research of Eugene Fama and Kenneth French from the University of Chicago. The philosophy is based on the Free Market Portfolio Theory investment approach, which emphasizes academic principles in investing.

“I believe investing advice that champions Nobel Prize-winning research is more credible than the so-called guidance given by traditional financial institutions,” Helman said. “Americans are bombarded with Wall Street’s version of how to create and maintain wealth, but they have massive advertising budgets and their own agendas.

“Without relying on sound, academically-based research about investing, consumers are certain to fall victim to the myths and lies promoted by traditional financial institutions,” Helman added.

Helman calls his company the Institute for Healthy Investing because he believes in the academic-based approach, and he applies certain elements of what he learned in medical school to investing. Among these elements are:

• Don’t recommend something different to the public than you would your own family.

• Ask what evidence is this based on?

• Put the patient’s (or in this case, the investor’s) interest first.

“My objective is to help clients reduce excessive hidden fees they are paying traditional financial institutions to invest, reduce risk through prudent diversification and offer access to and knowledge about academically-tested and evidence-based investing,” Helman said.

Helman is implementing his philosophy through books and DVDs. “Navigating the Fog of Investing” exposes the conspiring minds of the brokerage community and their tawdry ways, Helman says. Armed with a hidden camera, Helman reveals stock brokers and investment gurus for what they really are - financial cheerleaders without the skirts. With Matson, Helman co-authored the book “The Dirty, Filthy Lies My Broker Taught Me and 101 Truths About Money and Investing.” The package he is selling, which for a limited time is $100, includes a copy of the DVD and the book as well as:

• The Investor Awareness Guide (which includes details about what you should know before you make your next investing decision)

• The Investor Inventory workbook and audio CD (which includes 20 questions you should answer before investing)

• The workbook “Separating Myths From Truths: The Story of Investing”

• The audio CD “Seven Deadly Investor Traps That Destroy Your Wealth and Three Power Strategies to Fix Your Portfolio.”

For more information, visit www.investingfog.com and www.freemarketinvestor.com.