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Of course I, like many others, had my first
investment with a typical bank savings account. While
I was in the US Army during 1993 I took my first steps investing with Mutual Funds. Then
soon after moved to trading stocks, before the Internet was available to trade stocks
online and you had
to pick up a phone and call a stock broker. After the army I still traded stocks
and took another new step to trade options. Short
time after that I got involved with Futures.
Shortly after I entered the world of
trading stocks and mutual funds, I saw first hand how investment firms try
to sale their business services to the public. This happened to be with the
army battalion to which I was assigned. They were telling all the great things
that can come from their investment services. I looked around at the other
soldiers' faces to see if they were buying in to the sales pitch. I was
already knowledgeable about the difference between
hundreds of mutual funds so I knew they were not giving full disclosure on
the subject. I had to speak up and put a tough question to
the two ladies that were reps with this investment firm. From the back of the room
I stood up and asked, "What are the fees involved with buying and
selling mutual funds with your company?" They were shocked and awed when a
soldier put them on the spot. They delayed for a moment before responding to my
question. Then they sidetracked the question by responding that there are different fees that can be reviewed in the
pamphlet. I was angry
they avoided answering my question. I spoke up again and asked, "Are
there front
and back end load fees?" They said there may be with some of their funds.
Okay, I knew they were working against me here, so I ended the
discussion.
Later that week I had several soldiers,
enlisted and officers, come up to me asking me to explain more in detail
what the paper work they received from the investment firm meant and
what mutual funds to choose.
Most of the soldiers in my battalion knew I was already
investing in stocks and mutual funds and had begun the process of buying real
estate.
One of the army officers had asked me if
I would review the
mutual funds his wife and him had bought from another investment
firm.
I was very happy to offer the expertise I have on the subject. So he
took me to their home for a home cooked meal.
After
dinner I read over the three months of mutual funds statements they had received, along with the funds prospective.
To their credit they had been
investing $300 a month in two mutual funds. Most
soldiers in my unit had no current investing plan. In reviewing their
monthly statement, I noticed that only $200 of their monthly investment
was actually going towards
the two mutual funds. I asked them, " Do you know were the other $100
is going?" They had no clue nor was there full disclosure from the sales rep of
the funds. That was no surprise to me. I suggested we call the mutual fund
company and ask them. We got in touch with a customer services rep. They
told us for the first 12 months $100 will be put towards the fee for
the sales agent helping them get into the fund family. We were disgusted
that the sales agent received $1200 for the 15 minutes spent on the paper work
to process their auto payments. Their statement also revealed that their funds
also had a front load fee. That
meant at the current time each share was priced at $26 and they had to pay
something like $28. It was time to move
in combat speed. They canceled the auto pay and left that group of funds.
They still lost the $100 of the three months to the sales agent. I gave
them my current watch list of the best mutual funds with none of these
mafia fees. They said they wished they had come to me first and paid me the
$300. I said I would have been happy for $200.
This
instilled in me to this day to thoroughly be aware of my investment decisions.
I also felt at that point that I had a mission to educate others about my investing methods and current opinion of the
stock market.
I
have developed the workshop for beginning
and experienced investors alike. Click
here to learn more about attending the workshop.
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