Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

The Tragic Investing Tale of "Big Al" Clifton

InvestorEducation / Learning to Invest Jun 04, 2012 - 08:25 AM GMT

By: Money_Morning

InvestorEducation

Best Financial Markets Analysis ArticleBy William Patalon III writes: One of our core messages here at Money Morning - and one that we tend to repeat over and over - is that it is crucial for you to take control of your own financial destiny.

To underscore just how important this is, allow me to share a personal story I guarantee will drive this point home.

I've massaged the biographical details on this one a bit to protect the folks who are involved. But the rest of the facts are true.


This is the story of Alvin "Big Al" Clifton, the much-loved stepfather of a boyhood friend of mine. Big Al (who I always addressed as "sir") was the longtime manager of a highly successful paint-and-body shop in my hometown.

He knew everybody, and everybody knew "Big Al."

He was boisterous and colorful - an acquired taste for some, I guess. But he also had a heart of gold - as I well knew.

In the mid-1980s, just after I started my newspaper career at a small weekly (and was very poor), I stopped in to see Mr. Clifton after I'd banged up my Chevette - my daily transportation, and the only vehicle I had.

Although Mr. Clifton was in business to make money from precisely this kind of situation, I watched as he picked up his phone, dialed a buddy and within five minutes had arranged for me to get the hood, radiator-core support, grill and bumper that I needed - all for free.

Some years later, when the body shop was sold to a new owner from out of town, Mr. Clifton was unceremoniously dumped from the only place he'd ever worked.

They gave him a lump-sum distribution - a pension and severance - that amounted to about $140,000.

That wasn't even close to being enough for a guy who was only 59, and had enough health problems to keep him from starting a second "career."

And Mr. Clifton knew it.

"William," he said to me one evening when I was at his house for a visit, "you know a lot about investments, don't you? Well, here's my situation. I have 140 grand from my retirement and buyout. I need to double that in a year. And I can't afford to take any risk."

At first I thought Mr. Clifton was pulling my chain: After all, this was the colorful "Big Al"- a man who liked a good laugh.

But I immediately saw he was serious.

"That's not possible, sir," I told my buddy's stepdad. "To even try for a return like that, you're going to have to take on so much risk that you could actually end up with nothing. Please don't do it. I'll help you find someone good to work with, and we'll get a good plan worked out for you."

I argued pretty hard, as I recall, and even resorted to begging. I left that night believing I'd made my point.

Unfortunately for "Big Al," there are brokers out there who are only too happy to tell their "clients" what they want to hear. A young broker from one of the discount houses did just that.

"Sure, Mr. Clifton," the young broker assured him, "we can double your money."

Even more unfortunate: It was 2000, the height of the "dot-com" era - which made it seem possible to get the kind of returns Mr. Clifton was hoping for.

That young broker put Big Al in all sorts of dot-com stocks, "unit investment trusts" (UITs) that were focused on the Internet, and some other tech-focused investments that actually assessed penalties for early withdrawal.

The risk levels on each of the individual investments were huge. And they all faced the same risks, meaning that if one of the holdings got clobbered, chances were good that all the investments would get clobbered.

And that's exactly what happened...

Mr. Clifton was late to the Internet-bubble party. When it burst, his Internet-fueled portfolio blew up.

And the shellacking he took was magnified by the penalties he had to pay when he tried to extract some of his money from the high-commission investment products the broker had put him into.

By the time Big Al extricated himself from the smoking crater that used to be his retirement portfolio, he'd lost about half his money.

Sadly, he never recovered.

One day about four years later, the man they called Big Al told his wife that he felt lousy and was going to take an afternoon nap. Mr. Clifton never woke up.

Although he'd lived in Maryland, Mr. Clifton's funeral was held in the tiny Pennsylvania town where he grew up. The line at the viewing was so long that folks had to wait for two hours just to pay their respects.

I've thought about the sad case of Big Al often in the ensuing decade. And what I realized is that there are at least five lessons to learn from it all. They are:

  1. First and foremost, take charge of your own financial future. If you don't, no one else will.
  2. As part of Lesson No. 1, if you are going to invest, understand what it is that you're buying. Mr. Clifton didn't, and the hair-trigger booby trap that stood between him and his retirement savings proved to be disastrous.
  3. There are many good, professional people at work in the financial-services industry. But you have to watch out for the passel of jackals that are terrific at sensing weakness and vulnerability- the kind of vulnerability created by a lack of knowledge or understanding.
  4. Never try to "make" the money you need in the stock market. If you need $5,000 for a down payment on a car in six months, don't try to make it in the market. Mr. Clifton committed that sin, too, and it cost him.
  5. Be honest when you assess risk. Don't take on more than you're comfortable with, or that doesn't mesh with your financial goals.
Take these lessons to heart.

Embrace them as the "second chance" that "Big Al" Clifton never received.

[Editor's Note: Since its launch in August, Bill Patalon's Private Briefing has been an overnight success.

With his 24/7 access to stock market gurus like Martin Hutchinson, Keith Fitz-Gerald, Shah Gilani and Dr. Kent Moors, Bill is able to provide Private Briefing subscribers with an inside look at some of their key recommendations.

To learn more about Private Briefing,
click here.]

Source :http://moneymorning.com/2012/06/04/the-tragic-investing-tale-of-big-al-clifton/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules