posted on January 22nd 2018 in Fort Worth CFP Team Posts with 0 Comments /

This is an excerpt from the whitepaper “Exaggerated Returns: How Trading Newsletters & Services Can Make Such Outrageous Claims, and How to Spot Them” by Joshua Wilson, CMT, AIF. Download the full document here.

Simple — they aren’t professionals. Here are some excerpts from the disclosure statement for one such service, emphasis mine.

“The Company is not a registered investment adviser, stockbroker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Company’s software or its individual scans and searches.”

These people are not even brokers or advisors of any kind who owe you so much as a “suitability” duty — much less owe you a fiduciary duty! The results? Aren’t even typical.

“…has been prepared without regard to any particular investment objectives, financial situation, and needs. Accordingly, you should not act on any information in the Site and the Network without obtaining specific advice from your professional securities or financial advisor, and should not rely on information herein as the primary basis for your investment decisions. Decisions to embark upon trading with real funds based on any information contained within the Site and the Network is your own sole decision and responsibility. Any profits or losses resulting from participating in the markets with real funds rests solely with you, and not with the Company.”

I bet you glossed over the first line of this paragraph about having no regard for your situation, but that line is critical. It basically means they can show you trades someone with your risk tolerance should never make. They may show you when a high-risk trade pays off handsomely, but not when it loses badly! A fiduciary, on the other hand, has a duty to know your situation and keep you from taking risks you shouldn’t be making based on your situation. A fiduciary advisor also can’t pick and choose what to show you and what not to show you. They have to take great care in setting realistic expectations for you instead of just quoting what their best clients or best trades did.

about the author: Joshua I. Wilson CMT

Josh-Wilson CMTJoshua I. Wilson, CMT®, AIF® is a partner and wealth manager who has managed over $2B for TD Ameritrade. Joshua led the national training and development program for all of TDA’s new advisors and managers, won a national coaching award. Joshua gave his graduation speech at Brown University. Joshua is a Chartered Market Technician® (CMT®) and a Accredited Investment Fiduciary® (AIF®).

Learn more and/or Contact Joshua

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