Wall Street is considered as a common name all over the world. It is considered as the global business hub. In the past days, Wall Street motto was to buy and hold. More specifically they wanted you to first buy stocks and then hold them for a sufficiently long period of time. Wall Street has prompted a good number of consumers to purchase these stocks and hoard them. From 1960 onwards, the holding period of the stocks was about eight years. It was until 1990 that this specific time span dropped to two years. In 2000s it further diminished to eight months. Now a day, stocks are traded in less than a second as people have finally understood the unfriendly policy of Wall Street, towards its customers.
Like their previous slogan of hold and buy, Wall Street requires a few more to keep its business going on. This is for the reason that they can survive without these hollow schemes. They have to have some sort of plan through which they can ensnare people. They can use mutual funds, futures, ETF’s etc for their vested interests.
Asset allocation, otherwise known as diversification, has been considered as the newest weapon of Wall Street. Now days, everybody is talking about Asset allocation and is portrayed as the best method for incumbent investment. Similar to all new schemes like RE ITs (Real Estate investment trusts) and ETFs (Exchange traded funds), the aim of asset allocation is to increase the diversity so that more people can be financially victimized.
Wall Street wants to sell its customer the things which they don’t know, for the sake of its very own benefit. There is no mutual interest; rather it is based on one-party interest. Unlike Warren Buffett, Wall Street wants you to invest in things which are anonymous for you.
These types of investing consultants want you to invest your money in schemes about which you have no hint. Also, these courses are not so easily learn able and are not related with your trade. The sole purpose of these advisors is to increase your headaches by involving you in ETFs, REITs, municipal bonds and a lot of other such things. Check the following example for your understanding.
When you go to broker for investing in this scheme, he would definitely provide you with a lot of statistical data. You will be provided with a large number of offers, besides healthy reviews of other people. Let us consider one of the assessment allocation offers by your brokers for the last year.
Five per cent in cash equivalents
Fifteen per cent in an S&P 500 index fund (IVV)
Five per cent in Real Estate Investment Trusts (VNQ)
10 per cent in a diversified portfolio of convertible securities (AC HIX)
Five per cent in an international bond fund for inflation-indexed bonds (WIP) and so on.
This is a rough sketch of asset allocation of the previous year. He will describe you it as a plan for moderate investor. He will explain all of this to you as follow. “I want you to make five per cent initial investment in cash while the rest of the investment is to be made as mentioned above. Although you no know nothing about these things, yet there should be no serious concerns from your side. These things are so cumbersome and difficult that even one year would be insufficient for you to understand these diverse subjects. So my strong recommendation for you would be not to put yourself in this menace, rather you should come to practical field. Regarding the issue of lack of understanding, even I don’t know these things but still I am doing this business successfully. In the end, I would just say to you to come to the battle field and made some serious investment so that you can earn a lot.“
In nutshell, asset allocation isn’t more than a scam. It really makes you fool. It traps a significant amount of your hard earned money in a thing, which you really don’t know. If truth is to be told, it is ridiculous to invest your money in any such scheme. When you don’t even know the basics of asset allocation, then there is absolutely no point in investing it. As you don’t know the factors which are supposed to influence it, then how come you may able to earn good amount of money from it?
It’s not yours scheme; rather it is a plot of Wall Street to make you invest in things of its own benefit. Wall Street wants to empty your pocket though such plans.
It’s completely irrational to invest in something which you don’t know. You have no method to find the sincerity of your broker with your investment. You have to completely trust him for such unknown things. It truth is to be told, your broker himself would never make such an investment on its own. He would never put his money at stake. This is the absolute hypocrisy of these Wall Street brokers. You can have a good estimate of the reliability and authenticity of this scheme. They just want to grab your funds, so that they bank accounts remain filled.
There are a good number of people who have betrayed by these schemes. You can easily find these individuals online as well as offline. These people will give you a clear picture and will make you understand the reality of these brokers. They will tell you the consequences of such investments by portraying the real face of these brokers.
In the end, doing such an investment is a financial suicide. Instead of earning some more money, you will lose all of your previous wealth. So it would be really wise to make investment in some other thing which can allow you to generate substantial money with reliability.