WITH markets recently hitting all-time record highs, we have seen many unqualified writers making "grand statements" about the stock market where they have no foundation.
Unfortunately these propagandist articles contain inaccurate and unreliable information which is misleading to investors.
The people writing these articles or blogs have no accountability to their readers and in most cases are trying to sell a subscription to their newsletter or other products.
One particular writer that I came across sent an email to investors stating the market will fall 60 per cent in the next few weeks; the same individual also sells "doomsday products".
Besides posting daily tips for doomsday preparation and selling a guide on how to prepare for emergencies, he has been hosting seminars for several years claiming that the stock market is going to crash.
Somebody should tell him that it already did and in reality markets are up significantly since he started these meetings!
Another writer that I have seen states that now is a great time to buy silver "By taking advantage of something I call Silver Strikes, you can jump into the silver market and earn 36 times what you could with just dividends - without buying a single stock or any physical silver!" a completely outrageous comment.
This guy wants $800 for an annual newsletter subscription, yet has no formal financial training.
Another writer indicated that the economy was ready to collapse because of consumer weakness, which is also untrue. U.S. consumer confidence is strong and the economy is improving, as can be seen by the latest retail sales data that resulted in one of the highest numbers recorded in a long time.
It is important to remember that these bloggers and spammers don't actually manage money, so they aren't regulated the same as financial advisors or portfolio managers.
Therefore they are free to say whatever they wish no matter how absurd it sounds.
To give you an idea of how the scam works, let's say they start with 10,000 individuals, half get told the market is going up and the other half get told it's going down. The next month they send 5,000 newsletters to the people that received the correct prediction in the previous month.
They repeat this over the next few months until they are left with a pool of people who consistently received "accurate predictions" and think the newsletter writer is a guru!
It's a complete sham. These writers are capitalizing on investor fears from the past few years when the market has been volatile. You can see why smart people get conned into thinking these guys know what there are talking about.
For investors who have been receiving these emails, I recommend ignoring them or requesting to be removed from their mailing list.
Although a broken clock is right twice a day, no one would rely on this clock.
The same goes for your investment portfolio. Don't take financial advice from someone who is not qualified and has no accountability to you if they are wrong!
Look to more reliable sources for news on the financial markets through websites such as Bloomberg and most importantly speak to a qualified professional for timely and actionable advice.
Lori Pinkowski is a portfolio manager and senior vice-president, private client group, at Raymond James Ltd., a member of the Canadian Investor Protection Fund. This article is for informational purposes only and does not necessarily reflect the opinions of Raymond James. Pinkowski can answer any questions at 604-915-LORI or lori. pinkowski@raymondjames. ca. You can also listen to her every Friday on CKNW at 5: 35 p.m.
