IPO for 'Shell' Companies

If you think that these companies have anything to do with the collection or selling of shells you are mistaken. This particular type of company is making occasional appearances in the UK stock market. The name refers to the fact that the company has no or only very marginal real business activities and is in the main designed to allow new management or controlling shareholders to raise money for a new venture or use an existing (usually languishing) listed business as a quick way to gain control over a company whose shares can be used as acquisition currency. Unfortunately in most cases the new promoters behind the shell company are able to create an air of excitement and even hype and any new investors that subscribe to shares in the IPO or subsequent secondary share issues are required to pay a hefty premium for the privilege to be on board for the ride. As in any IPO investors should be careful not to fall for a good 'story' and only invest on the basis of value and solid fundamentals.

Do you understand how your advisor is compensated?

Understanding the way your financial advisor is compensated allows you to see the motives that are behind the recommendations he or she may make. The latest revision to the pay plan that Merrill Lynch offers to its brokers is quite revealing as it talks a lot about how brokers will be paid but very little (or nothing?) about how they could and should improve the performance of client portfolios. It is especially revealing the a lot of emphasis (and incentive pay) goes into efforts to move client portfolios into trusts. This may be less an effort to improve performance and more a ploy to make sure that client money sticks with the firm as it would be less easy to transfer assets to another wealth manager. Maybe there should be a 'Certificate' teaching how to interact with financial advisors - there are any number of qualifications for them but they all are no guarantee for cost-effective and well performing investment advice.

Should you listen to the Experts and Investment Analysts?

When two reputable investment experts have diametrically opposed views on the same day (here, here)you have to wonder whether or not you should pay any attention to their opinion. News media as well as brokers and investment advisors constantly have to fight for the attention of current and prospective customers and can also rely on the fact that after a few days hardly anyone will remember what they said on a given day. Investors therefore are advised to stick to a well-thought-out investment philosophy based on their personal circumstances and requirements. They should focus on eliminating any avoidable risks as well as containing the annual costs and fees associated with managing their wealth.

Plan for Retirement with free online course

The return on the time you invest when watching this course might approach infinity as the course is free!

Tweets - a better mousetrap or another hype?

Trying to outrun other market participants with quicker access to news may be the Holy Grail to investment success ever since Rothschild reputedly scored a major investment coup when he got information about the outcome of the Battle of Waterloo before others. So it comes as no surprise that someone would try to mine Twitter for useful and timely investment signals. But be under no illusion - SOME tweets may contain useful information, but which ones, that is the question. This may well be just another momentum-chasing fad - it will be interesting to test the performance record of this approach after a number of years....in the meantime let us remember the old adage: There is a sucker born every minute!

Stock Accumulators - stay away!

The skill of financial product salespeople - often disguised as financial 'advisers' - does not seem to know any limit. Even the majority of experienced finance professionals will never have heard of these derivative products and investors brave enough to have a close look will require an advanced maths degree (and a strong drink) if they want to get their heads around this 'structure'.

Sauve qui peut! Your Pension is not safe!

Any trust you may put into the state providing you with a secure retirement income must be shattered by the news that another country, this time Poland, a honourable (?) member of the European 'Community' has conducted a defacto nationalisation of private pensions. No comment needed. So who is next? The Indian peasants must be on to something when they buy their gold.

How to select a Private Bank - not for Snob Appeal!

Report about Goldman Sachs 'unboarding' the less wealthy among its former employees should be a reminder that snob appeal can be an expensive aspect when selecting a provider of private banking services. The key aspect any investor should consider is performance - not 'prestige' or the art in the meeting room or the architecture of the office building. Unfortunately most investors - even the 'high-net' or even 'ultra high-net' ones that most bankers pursue - find it difficult - if not impossible - to to obtain or compare performance data that is verifiable.

Famous Football Coach picks wrong Financial Adviser - loses £10 Million

Sven Goran Eriksson may hate the man that he claims lost him £10 million. Another warning to all investors to carefully vet any adviser they do business with.

Broker versus Adviser

Investors are often not aware that their investment adviser is to all intents and purposes a salesman who earns a commission (often euphemistically called a 'bonus') that depends on the amount and type of 'investment products' he sells to the customer. Such an 'adviser' has to be seen as a broker. Investors are urged to ask any adviser how he is paid and if his firm gets any commission or other rewards from the fund managers or products he recommends.