The Cost of Poor Advice
Everyone takes or listens to some form of financial advice but what is it really worth? Well nothing if it is coming from the wrong source!
I was contacted last week by a client in regards to a particular trade that he has open. Unfortunately under our license I cannot provide specific financial advice to anyone but what he told me was of grave concern.
Beware the Speaker
You see the problem was he had just completed a weekend seminar with an educator on Options trading. Now I have no problems with people becoming educated, in fact I am all for it, but what I am against is promoters touting that they have the one and only strategy that you will ever need to be successful and financially independent.
In this case the client, who has never traded any instrument before, was told to go and write naked calls and puts on stocks in the ASX as the risk would be minimal. Apparently he went on further to say that you should write calls and forget about learning to buy them first and at the very least learning to trade them.
Hang On to Your Money
My advice is do NOT part with any of your money on these types of seminars until you have at least verified some of the content contained within them. The strategy that this poor sole was led to believe would ease his financial situation is one that only professionals should or would use. The inherent risks are endless for the novice.
Happy Ending
Fortunately for this client he had time to remove his positions and reduce his exposure to what could have been an expensive and potentially life damaging result to his finances.
The regretful part of any industry is that there is a handful of people that do not send the right message or information. As always - Buyer Beware.
Happy Trading
Brad Smith
Author Credits ::
Pacific Investor Group is an Australian based specialist and licensed share market advisory and education company. We can be contacted on 61-7-5539 2588.