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The $38,485 Speeding Ticket: New Book Tells How to Avoid a Financial Asset Management Nightmare

Rich never expected a speeding ticket to cost him $38,485, but a new book illustrates the compounding
effect of innocent mistakes - and how to avoid a financial asset management nightmare.

New York (PRWeb) June 11, 2009 -- Rich was in a hurry to buy some groceries before heading home to watch the Yankees game. He was traveling 45 mph in a 45 mph zone, but missed the sudden sign change to 30 mph. The policeman pulled him over and handed him an $85 ticket. It wasn't a pleasant way to start his Sunday, but at least, Rich thought "that was that."

A few months later, Rich learned that his car insurance payments increased by $75 a month. Now his $85 speeding ticket mushroomed to $985. A hefty price to pay for going just 15 mph over the speed limit, but once again, Rich thought "that was that."

Six months later, Rich went to lock in a new home loan. A $750,000 house with a $500,000 mortgage seemed like a conservative ratio. But what Rich didn't know shocked him. The mortgage company not only checked his financials, they also checked his driving record. The speeding ticket cost him 0.25% on his interest rate (1/4 point). Over 30 years, 0.25% on a $500,000 mortgage equals $37,500. Adding the higher insurance premiums, the seemingly innocuous speeding ticket wound up costing Rich $38,485.

This and many other stories are recounted in a new book, "Wall Street Money Management Secrets: 12 Financial Asset Management Strategies That Professionals Use to Succeed in Declining Stock Markets," published by The Wall Street Institute For Stock Market Professionals. The print version is available at amazon.com, while the electronic version is available for free download at TheWallStreeteBook.com.

The book illustrates the compounding effect of innocent mistakes and how to avoid them, including: being deceived by market indices, not diversifying, falling victim to the ostrich effect during market declines, and listening to stock market gurus. The book, in simple English, avoids financial jargon and describes strategies that can be instantly implemented by most investors.

"We live in a financial asset management world whose interconnections are complex and difficult to see," explains Michael Weiss, Founder of Frontier Financial Advisors. "And we're finding that what you don't know can really hurt you. Tiny fluctuations that seem as innocuous as an $85 speeding ticket can wreak havoc on your investment portfolio. A seemingly small mistake can cost hundreds of thousands of dollars."

Weiss believes that in this difficult environment, it is more important than ever to work with a financial asset management team that makes clients aware of what they don't know. Investing in the stock market and working with large financial organizations can feel similar to Rich's experience. "You think you are ok, until something that you don't know has a severe negative impact on your financial wellbeing. That's investors need to understand one of the most misunderstood concepts of investing - risk management. Most firms and individual ignore this component of investing until it is too late. After which they feel dejected, frustrated and doubtful of the investment advice they have been receiving."

The only way to reverse this cycle, says Weiss, is to deploy a risk-controlled investment strategy from the onset. Investors must adapt to the changing market environment. When the stock market cycle turns negative, which it appears to do every four years, a risk-controlled strategy allows them to take advantage of the stocks temporarily on sale.

"Many times, after major corrections in the market those feelings lead the investor to look for alternative investment solutions at absolutely the wrong time. You can't buy low if you are exiting the stock market," says Weiss.

"Wall Street Money Management Secrets: 12 Financial Asset Management Strategies That Professionals Use to Succeed in Declining Stock Markets" is available for free download at http://www.thewallstreetebook.com.

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