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07/15/2006

The DaVinci Code & Financial Planning

            Almost every church sign I’ve driven past in the last couple of months has advertised a sermon on this book.  Some pastors went as far as to say, “I’ve forbidden my congregation from seeing it.”  Sorry…I read the book over a year ago…and saw the movie as well.  Both were entertaining…besides, I don’t know what the fuss is about.  Because of my faith, I know the truth and where to find the answers to those spiritual questions I ask myself regularly. To me it comes down to the fact that regardless of what one might think of the factual relevance of the storyline, when you go to Borders to buy a copy of the book, it’s always going to be in the Fiction section.

            Just as my faith helps me define the truth spiritually, my professional experience, education, and beliefs as a financial planner allow me to know the difference between “Financial Fiction” and what is actually true.  In the movie “The Man who Shot Liberty Valance” starring Jimmy Stewart, the hero is not made nor born, but manufactured by the storywriters of that time.  As the editor of the newspaper said, “This is the West.  When the legend becomes the fact, print the legend.”

Here are a few examples of “Financial Fiction”…Liberty Valance style:

LEGEND:  You don’t need a financial advisor to create wealth…do it yourself!
FACT:  From 1984-2004, the S & P 500 average annual return = 12.2%
The average investor = 3.5% (Dalbar)
 
 
 
 
LEGEND:  Knowing what to buy & sell and how to time the stock market is the key to wealth accumulation in investments
FACT:  Nobel Prize winning Study says only 2% market timing, 4% investment selection, 94% success rate with Asset Allocation via Modern Portfolio Theory. (Nobel Prize in Economics, 1990)
 
 
 
 
LEGEND:  We’ve all got plenty of time to save for retirement.
FACT:  41% of American households headed by individuals ages 45-54 do not have any retirement savings what so ever. (Congressional Research Service)
 
 
 
 
LEGEND:  The Dow Jones Industrial Average and the S & P 500 index are the leading indicators of how the US stock market is fairing.
FACT:  Only 30 stocks make up the DJIA. (dowjones.com) 22% of the largest US companies are not a part of the Index. (Russell, Inc.)
 
 
 
 
LEGEND:  Term insurance is the only type of life insurance you’ll ever need.
FACT:  Only 1% of all term policies issued result in death benefits to the named beneficiaries. (Penn State Study, 1994)

 

            So ask yourself, in your mind, what is legend and what is fact…and where did you get your information.  Unfortunately, Borders doesn’t have a “Financial Fiction” section, but if they did, it would probably be full of hundreds of books and magazines with “legendary” titles & cover stories.  If you are tired of Fiction and are ready to move over to the History and the Psychology sections, (remember, money has emotion) maybe it’s time to hit reply.

 

Regards,

Brian

www.briancarden.com               

Copyright 2006, Brian E. Carden

 

Securities offered through Securities America, Inc., Member NASD/SIPC, Brian E. Carden, Registered Representative

Advisory Services offered through Securities America Advisors, Inc., Brian E. Carden Financial Advisor

Posted by Brian Carden at 07:09:00 AM in Current Affairs, Financial, Weblogs

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