As I've never been a salesman, my direct involvement with non-professional investors has been minimal, However, that does not mean I have not received complaints when my advice goes wrong, and investors lose money.
After spending hours on the phone and listening to clients' complaints, salespeople can become much angrier than their investors, and they need to take it out on someone else. If the loss comes from my advice, then the buck stops with me!
I tell people that when complaints come, stick your hands up and say, Yep! I got that one wrong!
I have always found you are better off taking the complaints on the chin and then moving on.
It doesn't matter how solid your analysis is; you will get the market wrong as often as you get it right.
Let's face it, as an adviser, if you were right all the time, you wouldn't be advising someone else. You would be too busy trading with your own money.
It is because we do not make money on every trade. I believe you and your investors must know the risk-reward ratio before entering any investment.
When advisers receive the harshest complaints, it is often because they have not been transparent with their advice or have completely downplayed the risk involved.
Those whose sole advice has been, "buy and hold on for dear life", be it in crypto or equities, you must go through hell. And to be honest, I have little sympathy for your predicament.
If you advise others, you must have a risk management strategy. Quite frankly, your investors deserve no less.
Currently, I have a small exposure to the markets with low risk.
What I do have that is not looking very good is ownership of some physical gold and silver.
I increased this before Xmas, and at first glance, it looks like this part of my portfolio is underwater, and values could decline even further.
I increased my gold exposure because I considered it tangible, long-term insurance against when or if the shit hits the fan. Therefore I am not looking to dump my position anytime soon.
When the market rallied in March, I could have been short-term with it and taken a profit. And if I were looking at it from a short-term punt point of view, I could have placed a sliding stop when the market spiked and not allowed a winning punt to turn into a loss. But that was never the idea behind the purchase.
It's a physical holding for the long term. If it were short-term, I would have used more leverage.
Gold is currently trading about $40 below my purchase price.
Some people have questioned my idea of holding precious metals because they see a bearish technical formation on their spot gold charts which are dollar-based.
But, as the same people are also bearish on EURUSD, (perhaps down to 0.84) I see no need to panic, even if gold values decline another 10%.
In Euro terms, Gold is about Є100 higher than where I bought it due to the collapse in EURUSD. So I have a lot of breathing space.
My current gold position is a clear example of why you should consider various factors and look at numerous possibilities when hedging portfolio risk or making speculative bets.
Since last year, I have stressed the need to diversify, be defensive, and I have been banging the same drum about risk.
Many have ignored this, and that's fair enough.
However, I do not have people calling me every day complaining that they have lost 80% of their investment capital in one asset or asset class and asking me what I will do about it.
Luckily, I do not advise or issue recommendations to retail investors, so I rarely receive complaints.
I write to offer my observations and encourage less-seasoned professional advisers to look at alternative ways of approaching these markets.
I cannot stress enough that the role of any advisor is not to be a "super-star trader" in one asset: BTC, Gold, Equities, or EURUSD. Your job is to increase the value of your investor's portfolios and protect their portfolio from massive losses.
Your primary role as an adviser is to manage risk.
When it comes to complaints from investors, they will understand that you will not always be correct. But they will not be so understanding if you are not entirely transparent and do not employ good risk practices.
So, never forget your role as an investment adviser.
Until next time.