On Investment Advisory

Maybe I’m wildly off the mark, but it appears that most investment advice being offered today is complete bullshit. And this really isn’t even a current day problem — it’s systemic and runs back hundreds of thousands of years. I wasn’t there to personally vouch for it, but I can almost picture an ancient Semite being ripped off by a slick merchant with a sales pitch:

“If you loan me 15 pieces of silver for this promising silk robe transaction I have lined up in the Far East, I can assure you that your money will be returned to you 10-fold!”

Suckers aren’t a modern-day creation.

No I’m not an authority in the industry. No I don’t have a viable alternative that guarantees to eclipse market ‘benchmarks.’ I just believe that most of the financial guidance being peddled by ‘experts’ is so utterly useless that, as is the case for many things, inaction is better than action.

Investment Options

I think at this point it’s worth giving you a primer on the various types of investment products that are available to the average joe, as well as my two cents on these options. This list certainly isn’t meant to be exhaustive, as there are many other, often more dim-witted, investment schemes that can be utilized to piss away your money.

Some of you may question the irony in condemning investment advice while simultaneously offering advice on investing, and you’d be right to do so. Do your own independent research and make an effort to become at least mildly versed on these topics. Any half-wit will quickly gather that the entire industry is laden with crooks and swindlers. The game is so overtly rigged that it’s not even funny.


Perhaps the biggest joke of all is the notion of investing in individual stocks, be it through a brick & mortar or an online brokerage account. Financial advisors routinely tell the same old story:

“If at age 23, you decided to invest $1,000 per year into equities, assuming an 8% rate of return, you will have over half a million dollars by retirement age. That’s the power of compound interest!”

What a fucking joke. This sales pitch is so riddled with gross assumption and asinine promise that I don’t even know where to begin.

The obvious flaw in this statement is that you’re assuming an 8% year over year return for 30 + years of your existence. You can be almost certain that this will never be the case.

The stock market operates in boom and bust cycles. You may experience a period of rapid growth for 6–12 years, but you may just as quickly take a bath on a 60% drop in stock value in one fell swoop. These events will invariably be out of your control, and timing is everything. You’re likely to time it wrong.

The law of averages further complicates things. An advisor who actively manages client’s stock portfolios may claim to, ‘on- average,’ return 10% a year to their customers. That’s their 10 year proven track record. Just look at the graphical representation they show you:

Wow, what a guru!

What he or she doesn’t tell you is that instead of the assumed 10% return every year for 10 years, what really happened was a 3-year period of rapid growth, perhaps upwards of 20–30% per year, followed by a sharp downturn where our beloved Nostradamus loses their shirt.

Here’s what you assume happened:

10%, 10%, 10%, 10%, 10%, 10%, 10%, 10%, 10%, 10%

Here’s what really happened:

27%, 24%, 36%, -30% (everyone pulls their money out in frustration), 9%, 2%, -6%, 6%, -4%, 36%

The notion that you can even pick individual stocks in an effort to make consistent returns is ludicrous anyway. Stock price manipulation runs rampant throughout the entire marketplace. High frequency trading makes it impossible to compete with “professionals.” The existence of the Federal Reserve, activist investors, lobbies, think tanks, and dark money pools ensure that you will never have an edge as an individual stock picker. Save yourself the heartbreak and painstaking anxiety; don’t invest in individual stocks.


There are varying types of bonds that receive investment grades that are doled out by an oligarchic group of ratings agencies. We’re forced to take their investment grades at face value, even though they’ve proven time and time again to be nothing more than a farce. The incentive structure is completely twisted, but that’s an argument for another day.

Whether you’re buying corporate bonds from a business/company, municipal bonds from your local government, high-yield bonds from God knows where, or any other flavor of bond that can be cooked up by Wall Street, know this: individuals/countries/nations have been defaulting on their debt since the beginning of time. Once you allow debt to be forgiven (especially on the grandiose scale that was witnessed by the Wall Street bailout in 2007/8) you set a precedent.

It’s no longer implied that a debtor must pay back their loans. Large scale default is so commonplace that it effectively becomes the norm. The US Federal government is in debt by the trillions. Let’s not hold our breaths for when company XYZ says they’re repaying you for the corporate bond you lent to them.

Mutual Funds

Anything actively managed by an industry ‘expert’ is likely worthless. Mutual funds do their best to replicate what is already being done by market indices (S&P, Dow, Nasdaq, etc.). In this case, though, some yahoo is just in charge of picking the group of stocks that they feel best represents an opportunity for return. Mutual funds also come with the caveat of owing the associated investment manager a fee for their noble service. In fact, fees are baked into every corner of this industry. Do yourself a favor and pass.

Index Funds

Perhaps the most sterile of all of the investment options listed thus far. You’re literally investing in the performance of the entire market as a whole. Keep in mind that the indices (in reality still chosen by an, albeit smaller, group of fallible individuals) are comprised of hundreds of companies that are still subject to manipulation and abuse of insider information all the same.

More often than not, you’ll be required to post a minimum investment amount (usually to the tune of $10,000) to even qualify for many of the noteworthy funds offered. At the end of the day, the market goes up and the market comes down. If you have a crystal ball and you can time these events, then this is your best bet at achieving returns.

Exchange Traded Funds

Exchange traded funds (ETFs) are marketable securities that track the performance of essentially anything you want. If you think oil is going to go up, there’s an ETF that tracks the commodity price of oil. If you think corn prices are going to plummet, there’s an ETF that tracks the inverse performance of corn value. If you think it’s going to fucking rain next week, there’s likely an ETF for that as well.

ETFs (and most marketable securities for that matter) are nothing more than white collar bets masquerading around as a sound investment strategy. Although it may be momentarily thrilling to put your life savings on red and spin the wheel, you’re better off not.

Hedge Funds/Private Equity/The Shadow Banking System

This parasitic sect of high finance is almost completely made up elitist assholes who operate and breathe in a different stratosphere from normal humans. The opportunity to even invest alongside one of these societal pariahs is unlikely, however, as the majority of these types of funds are closed off to the public and reserved for the entitled.

Most of their returns are earned by targeting underperforming companies, gutting the sickly beasts, shaking up the capital structure, chopping up the debt to be sold off in pieces, and collecting exorbitant consulting fees along the way.

You’ll be relieved to hear that public pensions and employee retirement accounts are routinely placed in these highly leveraged investment vehicles…and they routinely fail. Make no mistake, this facet of the already value-less financial industry is so worthless that it pains me to believe it even exists.

Real Estate

I once read somewhere that real estate earns on average around 2% per year. Take into account inflation and it essentially earns nothing. I’ve also read multiple accounts of people making a killing investing in real estate, so like most investment options, it’s a gamble.

For most people, to even be qualified to purchase real estate requires that you seek financing from a banking institution. Right off the bat, you’re strapped with an immense amount of debt that you’re forced to battle against for the next 15–30 years of your existence. Take into account taxes, general upkeep, interest payments, and an array of other concerns, and the whole production just doesn’t seem worth it.

The American dream was built around the presumption that everybody wanted to start a family, have 2.5 kids (averages, remember), purchase a Labrador retriever (likely on credit), finance a car, and purchase a home (well, a mortgage). The entire dream was predicated around the consumption of debt. More and more debt. Add in student loans, credit cards, and anything else you can think of, debt is one of the most suffocating forces in the universe.

And unless you’re a too big to fail bank, YOUR debt has to be repaid — it’s the law, remember?

Precious Metals & Commodities

There’s always been a finite amount of precious metals (gold, silver, copper, etc.) in the world, and some of it even provides the raw material for the creation of consumer and industrial goods. The finite nature of this asset class makes it enticing to own from time to time. People want a claim to things that are exclusive — it’s in our human nature. But speculate on these all you want, the pricing/market manipulation that this sector is subject to by certain governments makes it impossible to rely on it as a sound investment.

The same can be said for commodities. Oil, grain, cattle, corn — at the very least these things are consumed by society and provide some sort of marginal benefit. Market manipulation & speculation are problematic here though, too.

In fact, the industrial food chain actually relies on the blatant manipulation of markets to sell their products. Take a look at the next packaged/processed good you buy at the grocery store. Nine times out of ten it will contain either the outright ingredient of corn or some mutant lab derivative of the kernel. Big food banks on the raw ingredient cost of their miracle crop to be kept low so they can continue to churn out and scale the production of their rendition of what most people associate as being ‘food.’

Trade all of the futures, forwards and options you’d like, you’ll still end up getting burned in the end like everyone else.

What to invest in?

I don’t fucking know. The only thing that I DO know is that the market, broadly speaking, has been subject to boom and bust cycles over the course of history. Whether the culprit is top down government, interventionism, de-regulation, or anything in between is largely irrelevant. The market comes crashing down at some point or another time and time again — it always does.

The best advice is to retain your money in an account that’s as liquid as possible (checking/savings account, mattress, etc.) for the time being and wait for the inevitable house of cards to collapse. After this has happened, feel free to withdraw the maximum amount of money you’re willing to lose and invest in index funds or an ETF that tracks the performance of Index funds.

At that point, you may or may not enjoy a few years of synthetic asset inflation as the federal reserve manipulates monetary policy to their liking in order to artificially stimulate the economy into another period of rapid “growth.” And if you’re full of chutzpah, push your luck and see how long you can hold out before selling. Hopefully you get out just in time before the pattern repeats itself.

In the meantime, you can always invest your money in learning new skills or trades in the hopes of increasing your earned income — you know, activities that actually help contribute to the tangible growth of society.

The select few people who make a killing through the investment vehicles mentioned above will indignantly argue that their income generation is ‘earned,’ too. But make no mistake, anything that can be achieved by sitting on a couch and doing nothing is, almost by definition, unearned.

“Everyone wants to be strong, but no one wants to lift these heavy-ass weights.”

-Benjamin Franklin