Thanks to the Dodd-Frank Act, the U.S. Securities and Exchange
Commission (SEC) conducted a study of the existing level of
financial literacy of retail investors. To no surprise to us at
Snider Advisors, the study found most investors have "a weak grasp
of elementary financial concepts." This is the biggest reason we
made financial education a critical component to our approach to
investing. (If you are interested in the full report, you can find
the 200+ page document
The retirement system in America has changed. You can no longer
expect a pension from your employer. That means the responsibility
for your retirement shifted from employers to employees.
Unfortunately, our education system was not included in this
monumental change in retirement planning. In our schooling we are
taught basic skills to help us lead productive, successful lives.
However, no one ever teaches us about spending, saving, and
investing. Everyone needs to actively seek out this knowledge or
you will be part of the financial illiterate.
Our brains are not wired for thinking about the future. For
thousands of years, humans woke up each day with the goal of
finding food and feeding themselves and their family each day.
Preparing for a long winter was their idea of long-term planning.
Retirement did not exist nor did the possibility of living until
you were 100. As a result, evolution created numerous behavioral
biases that consistently lead us to make incorrect decisions when
All our flaws have created an opportunity for someone else to
profit. Complex products, high commissions, and good salesmen have
lead to a successful financial services industry and a generation
of unprepared, doomed retirees. They prey on the naïve and
uninformed. Hidden in unread legal documents and fine print,
investors rarely find the transparency and disclosures necessary to
fully understand their investments. Finally, conflicts of interest
between buyers, sellers, and intermediaries are simply swept under
The road to financial success is difficult. We enter the journey
without the basic knowledge necessary. Our training was built for a
completely different battle. And finally, the road is lined with
pot holes and dead ends. However, by recognizing your short-comings
as well as seeking a
to guide you on your journey, you can be successful.
The intent of this article is to help expand your financial
education. Although the information included may be relevant to
your particular situation, it is not meant to be personalized
advice. When it comes to investing, insurance and financial
planning, it is important to speak to a professional and get advice
that is tailored to your unique, individual situation. All
investments involve risk including possible loss of principal.
Investment objectives, risks and other information are contained in
the Snider Investment Method Owner's Manual; read and consider them
carefully before investing. More information can be found on our
website or by calling 1-888-6SNIDER. Past performance is not
indicative of future results.