Junk Mail

by Bryan

3 comments

1 hipparchia { 10.15.08 at 8:38 pm }

heh.

otoh, i wish all the mailboxfuls of junk i got from the insurance companies were stamped with that.

2 Michael { 10.15.08 at 8:42 pm }

I’d prefer seeing that stamp on a mailing from my broker, since it would mean they’d be spending more of my money on making me money, and less on propping up their own bottom line.

3 Bryan { 10.15.08 at 9:25 pm }

There was a time,not that long ago when insurance companies were “mutual” corporations. You paid your premium for a while, but then the premiums were paid by the dividends from the money the company invested. When the dividend exceeded the premium, you got more insurance. Blue Cross/Blue Shield started that way and their health insurance was affordable. The “mutual” companies have almost all disappeared.

I have never had a regular broker after I looked at their actual process. I pay a broker when I want to buy a stock or sell it, but I don’t keep an account. I have invested in stock, buying it and holding it for years. Brokers are paid a management fee for the account and a transaction fee for every trade. It is their best interest to make a lot of trades, making a lot of transaction fees. They make money whether the market goes up or down, because you need a broker to buy and sell most stocks. They really aren’t worried about the performance of your stocks, only in the number of trades they can make.

Watching other people dealing with their brokers, it became apparent to me that brokers are not really interested in long term investors. They want people who jump around and move a lot. Brokers are interested in their bottom line, not yours. If brokers were paid based on how much money their clients make, then things would change radically.