Castles & Moats

Insurance and Investment Planning...Simply Explained

Financial Fiction2018-07-05T21:28:29+00:00

Chapter 18

Financial Fiction

This is a blog I wrote over a decade ago. The percentages are dated, but hopefully you get the idea…

One of my mentors calls the investment based magazines “financial pornography”. However, that’s a pretty strong word, so I’ll just call it “Financial Fiction”. After 25 years in the business watching the ebb and flow of the bulls and the bears, I’ve seen my share of misinformation. However, my professional experience, education, and beliefs as a financial advisor allow me to know the difference between “Financial Fiction” and what is true.

In the movie “The Man Who Shot Liberty Valance” starring Jimmy Stewart, the hero is not made nor born, but manufactured by the storywriters of that time. As the editor of the newspaper said, “This is the West. When the legend becomes the fact, print the legend.”

Here are a few examples of “Financial Fiction”…Liberty Valance style:

LEGEND: You don’t need a financial advisor to create wealth…do it yourself!
FACT: From 1984-2004, the S & P 500 average annual return = 12.2%. The average investor = 3.5% (Dalbar)

LEGEND: Knowing what to buy & sell and how to time the stock market is the key to wealth accumulation in investments
FACT: Nobel Prize Winning Study attributes success rates of 2% market timing, 4% investment selection, 94% Asset Allocation via Modern Portfolio Theory. (Nobel Prize in Economics, 1990)

LEGEND: We’ve all got plenty of time to save for retirement.
FACT: 41% of American households headed by individuals ages 45-54 do not have any retirement savings whatsoever. (Congressional Research Service)

LEGEND: The Dow Jones Industrial Average and the S & P 500 index are the leading indicators of how the US Stock Market is fairing.
FACT: Only 30 stocks make up the DJIA. (, 22% of the largest US companies are not a part of the Index. (Russell, Inc.)

LEGEND: Term insurance is the only type of life insurance you’ll ever need.
FACT: Only 1% of all term policies issued result in death benefits to the named beneficiaries. (Penn State Study, 1994)

So, ask yourself, in your mind, what is legend and what is fact…and where did you get your information. Unfortunately, Borders doesn’t have a “Financial Fiction” section, but if they did, it would probably be full of hundreds of books and magazines with “legendary” titles & cover stories.

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If you’re in need of auto, home, landlord, or life insurance, I look forward to getting to know you and becoming your partner in protection.

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