Information is vital to investing

Sources: They abound in print and on the Web, but beware of misinformation.

Dollars & Sense

October 28, 2001|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

As a healthy economy and vigorous stock market produced more investors in the 1990s, the numbers of Web sites, books and magazines offering financial advice also ballooned.

As a result, investors can tap an array of sources, much of it available with the click of a mouse.

"There's so much information that you're almost deluged with it," said Gilbert Davis, a financial planner in Lutherville.

Complicating matters, a lot of the information isn't always helpful or accurate, financial planners warn.

"I tell people to be especially careful going to the Internet," said William Poinsette, a financial adviser with American Express Financial Services Inc. "Probably only about 40 percent of it is real information and the other stuff is fluff. I went to one guy's Web site and I couldn't believe how much misinformation there was."

So how do you sift through it all?

There are no magic answers, but there are some pitfalls to watch out for, financial planners said.

For instance, stay away from any book, magazine or Internet site that promises a guaranteed return, Poinsette said.

And, when using information published by investment firms, be careful that they're not ultimately trying to sell you their products, said Nancy Bryant, owner of Bryant Financial Services Inc. in Towson.

Angela Davis, a Baltimore broker and customer relations manager with Legacy Unlimited LLC, cautions consumers to look for potential biases in the information.

"You have to make sure that whatever site you're going to doesn't have a hidden agenda, that they're not tied to any particular company or not trying to steer you to any company," Davis said.

Davis and several other Baltimore-area financial planners give high marks to the Internet site They say that it gives comprehensive information on everything from 401(k) retirement plans to mutual funds and that the analysts are independent.

"We like using Morningstar because they don't accept advertising dollars from any mutual fund company, so they're primarily a neutral party," said Paul Smeton, a financial planner with the Bel Air-based Harford Financial Group.

Other Web sites popular among planners are:,, com, and the

If you'd rather get the information from books or magazines, libraries and most bookstores have personal-finance sections that are crammed with choices.

"Look for established authors in the industry," Smeton said. "You're not looking for the latest fad or trend. You want something that has worked over time."

David Berman, a planner in Timonium, was such a fan of the book Why Smart People Make Big Money Mistakes and How to Correct Them that he sent copies to 250 clients. The book, written by Gary Belsky and Thomas Gilovich, examines the psyche of people with bad financial practices.

Suze Orman, a former broker, has written a number of popular books, including 9 Steps to Financial Freedom, Practical and Spiritual Steps So You Can Stop Worrying and The Courage to be Rich: Creating a Life of Material and Spiritual Abundance.

Cable shows and business magazines also can offer information on subjects such as the hottest mutual funds or the best stocks for the moment. But planners warn consumers to be wary of hot trends, because they often don't work for long-term strategies.

And, warned Berman: "Financial plans fail because people try to maneuver them constantly. The best idea is to develop a plan to work under a variety of circumstances."

No matter where you look for the information, planners say, don't take everything at face value, but use the information to help guide your financial decisions.

"As financial planners we really want informed clients," Smeton said. "The reason why we want that is not so we can talk jargon to them, but so that they can better understand what is being laid out to them and they can make informed decisions."

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