Real Geniuses

The Role of Financial Advisors

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By Dillon Norris

 When it comes to managing your finances, you can certainly do it yourself. If you don’t feel comfortable doing that, you can use the services of a financial analyst or a financial advisor. Choosing one is easy once you know what they can do for you.

A financial analyst and a personal financial advisor help to provide both an analysis and also guidance to businesses and individuals who seek help with their financial decisions. Each type of financial specialist gathers financial information, analyzes it, and makes a recommendation to his/her client. However, they do differ when it comes to the type of investment information that they can provide, and also the clients that they work for.

A financial analyst assesses the economic performance of companies and industries, as well and for firms and institutions that have money to invest. A personal financial advisor assesses the financial needs of people, able to offer them a wide range of options.

Also called securities analysts and investment analysts, a financial analyst works for banks, insurance companies, mutual and pension funds, securities firms, and also other businesses. He or she helps these companies and/or their clients make important investment decisions. A financial analyst read a company’s financial statements and also analyzes commodity prices, sales, costs, expenses, and also tax rates in order to determine the company’s value, as well as to project its future earnings.

The financial analyst meets with company officials in order to gain a better insight into the firm’s prospects and also to determine its managerial effectiveness. They also usually study an entire industry, assessing its current trends in business practices, products, and industry competition in order to keep abreast of new regulations and policies that may affect the industry. Monitoring the economy to determine its effect on earnings is also a duty.

A personal financial advisor, also known as a financial planner or a financial consultant, uses his/her knowledge of investments, tax laws, and also insurance in order to recommend financial options to individuals that fit with the client’s short-term and long-term goals. Financial planners deal with such issues as retirement and estate planning, funding for college, and also general investment options. Some financial advisors are able to advice on a wide array of topics, while others are specialized in certain areas.

Working with a financial advisor begins with a consultation, where he/she is able to obtain information on the client’s finances and financial goals A comprehensive financial plan is then developed that identifies problem areas, offers recommendations for improvement, and also selects appropriate investments that are compatible with what the client wants.

Clients usually meet with their financial advisor at least once a year to update them on potential investments, as well as determine if any changes have been made.

In addition, some advisors buy and sell financial products, including mutual funds or insurance, or are able to refer their clients to establishments who do.

Perhaps a financial advisor’s most important job is building a customer base, since referrals from satisfied clients help to generate new business. Other than being contacted by the client, financial advisors contact potential clients by offering seminars or lectures, or even meeting them through business and social contact.

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Learning from Mistakes in the Stock Market

By Dillon Norris

 Most stock traders, hereinafter referenced as the “Trivial Many”, the “Herd”, the “80″ of 80/20 fame and others, tend to make two fundamental mistakes when trading stocks and options. They buy heavily at the top of the market, right before it turns over. And…they sell at the bottoms of markets, right before they turn up.

Hum…not a good way to make money in the markets.

But, there’s a bright side. The “experts” blew it too. You see, most stock traders tend to listen to the analysts, their brokers, and their friends for stock tips.

Of course, their brokers are listening to the analysts, their friends and other brokers (who are listening to the same analysts, etc.)… So, as the Titanic is rolling over, we’re all still raising our glasses.

The problem is recurrent. Nobody (stock traders) really checks to see what the track records of these analysts really are. Studies going back as far as 50 years have shown that only a small fraction of what is recommended by the analysts makes money.

The bright side is that IF you decide to use the analysts as Insiders and others do, you will use their advice as a contrarian signal. After all, they’re WRONG most of the time! I don’t mean any single one. I mean the chorus of all of them will be slanted …So, you can learn to use that as a contrarian indicator.

Let me illustrate. Back in 2002, the Insiders were selling small and mid-sized companies at record rates. Now, if you were a stock trader then, you were probably tempted to get in on the action. But, you probably were tempted to BUY more stock in these companies. After all, who is going to be selling stocks when they are still going up?

Insiders that’s who.

But, stock traders, a.k.a. “the herd”, “the trivial many”, “the majority of stock traders”, were buying heavily. Unlike drinking heavily, such stock traders do NOT recover easily from their exuberance the next morning.

Granted the Dow was struggling even though these stocks were reaching new highs. And, the analysts were ecstatic. One stock analyst after another was paraded across the screen each with his or her own version of the refrain, “Buy.”

But, the Insiders weren’t buying. The Insiders were selling.

Within just a few short months (three months to be exact), those stock traders had lost upwards of 50% of their investment.

But, the Insiders had not lost due to their stock selling. They were out long before the market turned over, having kept their profits intact.

So, time and again, there is market exuberance close to the top of the markets. The chorus of analyst “experts” are all singing the refrain “buy!” The “herd” kicks into gear and revs up the buying spree. And the market turns over… and hurdles downward, leaving a trail of shirts along the way.

But, the Insiders didn’t lose their shirts.

So… who are these Insiders? And who is this Insiders expert George Muzea?

We’re coming to that.

…Again…

So… The new TV analysts are paraded before an adoring public. They present an impressive display on the Tube. Just ask them. They set before us stock tips which will “do wonders for your portfolio.” Just ask them.

And, in stock after stock, as they speed their way to the top, greed and irrational exuberance empties more wallets as stock traders and investors buy what they’re told to buy.

And predictably…in stock after stock, the market turns over…again.

What is it about stock traders which makes us learn from our experience at least a dozen or so times before it dawns on us, “This ain’t workin’?” I know what it is. We don’t know what we’re doing…

But, instead of admitting it, we say things like:

“Dang. I got whipsawed….” Notice we don’t say (well, at least I never said)… “I got faked out of my…”

“Look for divergence in trends.” But the one divergence we NEVER take is divergence from the chorus of the stock analysts!

“Buy on the rumor. Sell on the news.” But, what if the Insiders are buying …or selling,? You could find yourself chasing an extreme top in the market …or…panicking just before the market turns up from the bottom…

Experience teaches you to recognize a mistake when you’ve made it… again.

One should always forgive ones enemies… but not before they’re hanged.

So, who learned from their mistakes? Good question. Perhaps, those who want to leave the ranks of, what Insiders expert George Muzea calls, “the trivial many.”

George Muzea advises over 100 firms with a combined asset base of about one Trillion dollars. (Yes, one trillion.). They often pay his firm as much as a $100,000 a year for a consultation of less than an hour per month. If you thought Insiders information was some sort of fad…think again. George Muzea has been successfully calling the markets for 30 years. Learn from him.

“Trivial many”? George Muzea uses this term seriously so as to alert stock traders to the fact that the vast majority follow the analysts who are guessing and preening on TV. They are also losing other people’s money.

Others are found in the ranks of the investment letter writers. They too are members of the “trivial many.” Not a distinguished category to belong to.

Those stock traders and investors who follow them are also among the “trivial many.”

Use the analysts as a contrary indicator ALONG with a good understanding of the “activities” (translation: “buying and selling”) of the Insiders. Two great contrarian indicators. Again… according to Insiders expert George Muzea.

George Muzea is the Insiders expert…and has been for 3 decades. How do I know that?

Well, having been in the ranks of the “trivial many” stock traders and investors longer than I care to say (here), I have a singular disdain for the analysts. George Muzea didn’t have to teach me that. He taught me rather to use them as a very dependable contrary indicator…the chorus of them, that is.

Before I met George Muzea or learned (from him) anything about the Insiders, I determined to forgive and forget the analysts on TV. Of course, one should always forgive ones enemies… but not before they’re hanged.

Actually, in all seriousness, George Muzea taught me a very satisfying truth. If you know how to use them, those analysts can really be a contrarian help to you.

But, I don’t wish to give the impression that George Muzea teaches that “opposite is right.” He didn’t teach me to think that way. Nor do I teach that when the analysts and news letter writers say, “buy”, the stock traders should immediately “sell.” Nor, that when they say, “Sell”, stock traders immediately knee jerk a Call option.

No …no…no.

It’s far, far simpler than that.

Understand that when these analysts preen themselves shamelessly on the Tube or by newsletter, they need not be a factor at all. Just don’t listen to them until you see Insiders behavior changing. THEN…you learn to use analyst’s antics to gauge the markets as a contrarian.

To do that, you need to learn HOW the Insiders and the analysts work. I learned those lessons from Insiders expert George Muzea. You can too.

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Being a Successful Insurance Agent

By Dillon Norris

 The successful insurance agent always stays informed on how he or she can improve themselves both personally and professionally. In these days of fast paced lifestyles and the quickly disappearing face-to-face communication styles of doing business, the professional has to adapt. First, your personal good health is an important component to the success of your business. Second, I’ll present some proven business and customer satisfaction strategies that will guarantee you a thriving business and continued success for the future.

Taking care of your personal health is very often overlooked. The daily life of the professional is fraught with burnout and responsibilities. Many of us juggle on a daily basis the demands of family, parenting and other essential duties. Even the regular duties of getting the dog to the vet, grocery shopping and paying the bills, to name a few, can become dreaded tasks. Eventually, we’re going to get burned out and possibly ill. There are strategies to keeping a healthy mind and body.

Start having a social life outside of work. Just like your daily “to-do” lists at work, start planning a social “to-do” list. In other words, don’t forget to have some fun. Listen to your favorite music for a few minutes each day. Take in a concert or musical affair. Go out to dinner occasionally.

Exercise. Start going to the gym or fitness club. A healthy physical body will give the hard working professional the energy needed to be both highly productive and active socially. Go for a short walk in your neighborhood. Get some fresh air and breath.

Manage your time wisely. Poor time management can be costly. Missing appointments or being late NEVER looks good. The client’s time is just as valuable as yours.

Aside from these tips to stay healthy physically, don’t forget your mental health. Be sure to take regular breaks away from your desk, the phone, the laptop or anything else keeping you chained to your desk.

So, you might ask, what does this mean for me? Many studies have shown that productivity levels significantly decrease for the professional that doesn’t take time for fun, a social life, rest and exercise. If you become both physically and mentally weary, your customers are going to notice.

Many professionals are keenly aware of the saying “presentation is everything”. When you present yourself to a potential client, be it on the phone or in person, it is important to be at your best. I don’t know about you but I would definitely re-think associating with any professional that was unkempt in appearance or tired and sluggish in communications with me. It is very difficult to convince your potential clients to accept your advice to stay healthy when you appear physically ill yourself. Be a role model of what you’re trying to sell. Now that you have some vital information to help you stay personally healthy, let’s examine some strategies to keep your business thriving and profitable.

Continuing Education

Many professional associations offer continuing education workshops, seminars or classes. If you are not a member of a group or organization in your field, then look into classes at an institution of higher learning. It is imperative that you keep up to date on the latest news or information regarding the type of insurance you provide. Don’t forget-classes in human psychology can go a long way in providing you an advantage to understanding your customers better.

Network! Network! Network! Experienced agents know that aligning themselves with a company that will appreciate their skills is a must. Building a customer base with a reliable and strong company that can bring the clients to you is valuable. Your reputation as an experienced, reliant and self-assured insurance agent will guarantee a successful business and many good leads for clients.

The Psychology Of It All

Building a relationship with your customer(s) is integral to your success as an insurance professional. People want quality service. They rely on you to guide them into making the best decisions around their insurance coverage needs. If they don’t trust that you know what you are doing (remember the continuing education and how you present yourself?), they will not buy anything you have to offer. How can we gain their trust?

First and foremost, if you have been informed of a potential client looking for insurance, contact them immediately. As mentioned earlier, people want quality service. A quickly returned phone call sets a good first impression. This action alone tells your customer you care about their needs and are interested in their inquiry.

Next, follow through with what you promised in a timely manner. For example, if you stated you would get back to them in 48 hours on a matter, then return your call within that time.

Be sure you are giving them the appropriate and best advice you can. Obviously, I can’t stress the “educational” component enough in this article. None of us knows the answer to everything and it is acceptable to say I don’t know to a client’s question. Let them know that you will find the answer.

A healthy, informed and experienced insurance agent that is genuinely attentive to their client’s best interests and communicates that effectively will have a successful business.

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Thursday, April 29th, 2010 at 8:00 pm and is filed under business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.