Need stock advice? Ask a psychic.
TEXT OF STORY
Stacey Vanek-Smith: When the markets crashed last year, a lot of us saw our 401ks and investments lose about half of their value. Which led to the question: What about all those financial advisors we pay to know about this stuff? How did they miss this? Well, that sentiment has some people turning to less traditional sources of financial advice. Cash Peters has more.
Cash Peters: It’s so hard these days to get reliable investment advice.
Sheril McCormick: People used to be very trusting and turn over their money to brokers, and now they’re not. Now they’re saying, what other options do I have?
Exactly. That’s why they go to see Sheril McCormick. She’s an intuitive consultant, a sort of psychic financial muse.
McCormick: I am someone who says the trend looks like it’s going this way, your business deal, your investment has problems. And then they take all that information and they move forward with the decision on how to invest.
Oooh,see how useful that can be? And because she’s so often right, her client list includes all kinds of brokers and also private investors, such as this guy, Mr. X.
Mr. X: A year ago, she talked about the concept of buying precious metals. Now, if you look at gold, gold’s now climbing.
Peters: So you did you take it and run with it, though?
Mr. X: Are you kidding? Of course not.
Peters: You didn’t? You ignored it.
Mr. X: I ignored most of it.
Mr. X there. He didn’t want to be identified as a guy who uses a psychic. Obviously though, nobody really knows what the market’s going to do. Unless it’s the futures market, of course. Or the ES&P. But who can I trust most?
I went to UCLA’s Andersen School, which is like the Hogwarts of finance, and asked two of their greatest minds — Professor Shlomo Bernatzi and Professor Avanidar Subramanyam — the same question:
Peters: If you had to trust somebody with financial advice, who would you trust? A psychic, a stockbroker, a professor, or a monkey with a pin and a copy of the Wall Street Journal?
Shlomo Bernatzi: If you’re trying to make quick money, then you probably want the monkey, because the reality is if you want to get rich quickly, you’re going to have to take more risk than is sensible.
Avanidar Subramanyam: I would add a fourth category: people who are out there investing for wealthy clients like hedge funds and people like that, who are not giving advice, they’re putting their money where their mouth is.
Ah ha. In other words, independent, informed experts. Or, failing that:
Subramanyam: I would say the monkey’s just as good. It doesn’t cost you anything.
Eh, go with the monkey.
In Los Angeles — confused — I’m Cash Peters for Marketplace.
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