Margin Calls Destroyed My Early Success
I had set aside some money to invest into stocks. So opened an account with Internaxx bank and took out a cheap subscription under a special offer with the Porter Stansberry tipping sheet.
It was around 2010 and I did remarkably well, quickly building up a nice little portfolio and collecting dividends and watching as the values increased. What could go wrong? I had a phone call from some broker in the UK who specialised in pre IPO stocks and floatations so listened and the guy explained how using CFD’s you could leverage up your position and take control of a much bigger slice of the action and make a huge amount of money…….. I think some rich guy like Warren Buffet once said if you do not fully understand what you are investing in just give it a miss. So a new account was opened and I started off making my fortune.
Well no, I ended up with a black hole which had these things called margin calls which gobbled up cash like there was no tomorrow. I quickly realised that this was not working and bailed out pretty quickly but then got into leveraged trading on gold……… It was an interesting 6 months and taught me that I was not really understanding what was going on and I would never cut it as a trader so there was something positive at least.
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Deceived for Commission
When I was new and wanted to buy mutual funds, they sold me ULIP in the name of Mutual Funds, which they were not dealing even, but for getting some commision, they found me a good prey.
The Financial Planner Who Missed the Tax Benefits of Donating Appreciated Stock
A financial services guy told a lunch group that it made no difference whether people donated appreciated stock directly to a charity or sold it and donated the proceeds to charity. He claimed that, either way, “you still got the charitable deduction. ”While this is true, he completely ignored the capital gains tax that would be triggered when the person (rather than the charity) sold the appreciated stock. He could not comprehend that a direct donation of the appreciated stock to charity could save the donor from having to pay tax on that capital gain.
He was totally obsessed with the relatively minor charitable deduction on their tax return. I thought this was horrible advice and a disservice to anyone who followed his financial advice.
Nokia will rule the cell phone market
My 1 experience with a financial advisor 18 years ago. I did my high school senior project on investing. So my “mentor” was this financial advisor. I had 5k from my grandmothers to invest in (my great grandmother has mutual funds for all the grandkids so I cashed mine out and my grandma also threw in $1,000 for me)
Anyway.
His can’t miss these are about to be the next big thing picks were Nokia and Pioneer energy services. So Nokia only ever went downhill, I bought I think around $16 and sold at $5 some years later. Pioneer it actually had tripled at one point to $18 then a year later it was $2 then they went bankrupt so bye bye to that money.
I was really into computers back then, I had built my own and talked to him about how everyone in gaming was using Nvidia GeForce graphics cards. He has no interest in it. I can still hear his whiny voice saying how computer industry moves so fast and there will always be some new better faster thing on the market so that would be bad to invest in. And how Nokia was going to rule the cell phone market for years and years.
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