Investors ignore warnings in volatile markets [View All]

[WhiteTara]

http://today.reuters.co.uk/news/newsarticle.aspx?type=businessNews&storyid=2006-06-17T130639Z_01_N16202732_RTRUKOC_0_UK-COLUMN-LIFTING.xml&WTmodLoc=NewsArt-C2-AlsoToday-5

Investors ignore warnings in volatile markets
Sat Jun 17, 2006 2:06 PM BST
By Svea Herbst-Bayliss

BOSTON (Reuters) - When a 76-year-old pensioner recently told Jill Schlesinger he wanted to put 10 percent of his $100,000 (54,000 pound) portfolio into gold, the financial adviser knew the latest investment craze would likely end badly, and soon.

"With each passing quarter, people became more greedy and more complacent," said Schlesinger, chief investment officer at money-management firm StrategicPoint Investment Advisors in Providence, Rhode Island. "And people lose sight of what a diversified portfolio is and what risk is."

Suddenly, investors who had never traveled beyond the East Coast of the United States were plowing money into India and Brazil and metals mined in faraway places.

Many are now suffering double-digit losses, but they won't get much sympathy from regulators because they were warned and because losses aren't yet heavy enough, according to financial advisers.
snip
"With new products like ETFs it is easy to speculate, but investors have no one to blame but themselves for any losses on a run-up they thought looked like a sure thing," said Capital Advisory Group's Smith. "The fund firms are only producing the vehicles, they are not showing anyone how to use them."

more