unwise moves

I find it very frustrating that my Dad who is 73 years old just moved some of his retirement money into a group of mutual funds that are invested in various stock markets. Given his age and the fact that he will need the money (possibly soon) this is obviously bad advice. Now i know my Dad and i understand the way the conversation probably went down with the guy that sold him the funds, but there still is no excuse.

Dad: So what is the return i get now on this garunteed principal fund?
Sales Guy: Oh it's 4%
Dad: Well that's not good. I need to get more.
Sales Guy: Well we have other funds ...

Any financial advisor / salesperson should understand when someone in there 70s is telling them to put money they may need soon into the stock market, this is not a good thing.

Even if you are a die hard buy and hold guy, you should understand that at some point you must exit the stock markets as you cannot predict the near term gains (losses). Since you are in or near retirement you do not have time to recover any losses should they occur. The net effect is that my Dad is sure to lose a decent chunk of money. He is going to check on it by looking at his statement in 90 days. Well by then who knows where he will be at.

Given that the dow 30 has dropped 13% as of this writing from the October highs it is easy to see how much damage can occur in a short period of time. Also given the nature of the world financial markets, which are becoming more correlated, it is difficult to diversify your way out of trouble.

It's interesting how i can lose out to a sale's guy. Who are you going to listen too, your son who loves you or some guy selling mutual funds. Well the "some guy selling" mutual funds won out.

I hope we get lucky and he only loses a little bit. That way he will take action to unload into some investment more appropriate for him. I just shutter to think of the fees. If they charged him loads i will really be teed off!
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