Best Investment Sales Pitches I'm Not Buying: Silver Medal

Last Updated May 28, 2010 10:43 AM EDT

In the category of the best and most misleading sales pitches at the Money Show, the Silver Medal goes to a series of Newsletters showing "how to protect and grow your wealth - what Wall Street won't tell you." Easily topping the bronze medal winner, managed futures, announced Monday. Here's how it goes.

The pitch
There it was, a sign on a booth that said I can have it all. I can learn how to both protect and grow my portfolio. What Wall Street doesn't want us to know has to be a good thing for investors, right? With volatility up, many folks at the Money Show were fearful and looking for ways to hunker down and protect our nest egg, while still having it grow. Okay, I was ready to bite.

The appeal
Fear and greed are the two most powerful forces leading to our irrational investing behavior. Thus the word "protect" appeals to the fear that exists in the forefront of our minds in the wake of recent market losses and volatility, while the word "grow" appeals to our sense of greed. This is a pitch for all seasons and would always be timely, regardless of what markets were doing. Admittedly, I don't trust Wall Street, so telling investors Wall Street doesn't want us to know their secrets appeals to our emotions more today than ever.

The reality
Behind the great sales pitch were three market newsletters. One would have me buy five individual Chinese stocks, while the second would put me in individual U.S. stocks paying an average of a nine percent dividend. The third newsletter was on ETFs and seemed much more rational, at least until the salesman confided to me that these were sexy ETFs, such as tripled levered inverse ETFs. Yet another opportunity to play a zero sum game with more risk.

And you'll never guess how easy it is to "protect and grow" a portfolio - just buy a few China Stocks, some ultra high dividend stocks, and then bet against markets. Now the guy who writes all three newsletters may be able to convince some seniors that protecting a portfolio means placing bets on his recommendations but, to me, this seems like reckless speculation being pitched to the age group that could least afford it.

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Best Investment Sales Pitches I'm Not Buying: Bronze Medal
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    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.