Tweet When I walked into Foundation, The Rolling Stones’ 1971 album “Sticky Fingers” was playing in the background. Peter and Alex Cohen, brothers and owners of the shop, lounged on chairs as they chatted with two customers who were flipping through their newest shipment. “We started to sell records on Instagram to fund the other stuff […]
There I sat in beautiful Western North Carolina, undoubtedly surrounded in some way by many of you “half back” Floridians looking to escape the heat. Of course, the day was Saturday, July 15, and my column was, as usual, flirting with being late. I had not yet received the also usual “Scott, get your butt in gear” email from Debbie Goetz, our beloved and feared leader, but I was sure it was en route.
As I stared at the ancient and storied Smoky Mountains, I couldn’t come up with any meaningful or groundbreaking thoughts on investing that you haven’t already heard a million times — if not from me then from some other blathering idiot. “Save more,” “Be tax efficient,” “It’s long term, not short term,” “Blah blah, blah blah …”
But then, what did my eyes see but an E-Trade ad to bring the words out of me!
Seriously. An ad with a yacht and young, beautiful people drinking champagne. A few minutes later, another showed a guy sitting hopelessly in coach (yes, that is hopeless and uncomfortable) while longing for first class. Look: It’s a bird. It’s a plane. These ads seemed to proclaim they have a trading platform that is not only “free” but will apparently allow you — in no time — to trade your $5,000 savings account with such amazing performance that you too could be flying first class and dancing awkwardly on your $10 million yacht.
Hurray! My columns and boring drivel are no longer needed. Wait. What?
Where have these ads been prior to the recent market run? Why run these now after five years when the magic trading ads have been largely missing? (Ah, sarcasm, I’d be lost without you.)
Trading platform sales are — and always will be — based on the idea that you can trade successfully on your own and without much effort or experience. It is for this reason that these nice folks wait — until confidence is high in markets and people begin, as Warren Buffet once said, to confuse a bull market with genius — to start to rope you in.
Now, as you know, I am not in the habit of calling market tops. But these ads and the euphoria, not to mention the misplaced confidence they attach to themselves, are, in my 30 years’ experience, often a sign that things are getting a tiny bit frothy.
To be clear, I am not saying that folks who use such services are not capable or even sometimes successful. What I am saying is that the more I see these ads preying on your desire to own a yacht, the more I start to think it’s time to make sure I’m wearing a life preserver.
Scott Brown, Financial Advisor
720 Rugby Street, Suite 200, Orlando, FL 32804
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.
Keiron Partners is not a registered broker/dealer, nor is it affiliated with Raymond James Financial Services. Opinions expressed are those of Scott Brown and are not necessarily those of Raymond James.