Investment Rant!

My parents, who are both semi-retired, have lost a good chunk of their "low-risk" investments in the current recession that we're having. (Will we hear the word "depression" in a year? I think that's a distinct possibility.) Mark's mother, who is self-employed, has been extremely hard hit. Her investments are her retirement pension.

When we lived in Victoria we were saving money like mad and keeping it in a savings account at our bank where it collected interest for us. We were aware that we could invest it but we knew we'd be using most of it to buy a house within five years, so we left it where it was. Everyone we spoke to who worked in the investment industry tried to pressure us to play financial games with our money but we resisted. If we had done so, we could not have bought our house in cash.

I am therefore not sure what the purpose of a financial consultant is. We pay them to know what to do with our money, but when we lose money by following their recommendations, these people are somehow not penalized. They're all saying "don't worry; the market will go up again", but that doesn't help my parents or Mark's mother. They will never make back what they lost because they are already at the age where they should be retiring. They don't have another decade to let it sit in the hopes that what was lost will come back.

This past week I got around to doing something that I've been procrastinating on. When we started looking for a house last spring, we met with an advisor from a major investment company and set up - among other things - a life insurance policy. Our logic at the time was that we were about to go into debt (didn't happen - you all know the sordid land-buying story). If one of us died, it would leave the other person to shoulder the mortgage alone, so life insurance would have protected us against that sort of financial disaster. Things didn't go as planned and we are not currently in debt so I called to cancel our life insurance policy. We don't need it and we don't want the monthly bill for it. Who cares if we win the jackpot when one of us dies? One of us will still be dead and winning a prize for that just seems kind of sick.

Today our investment advisor from the major firm sent me an email for the first time in months, telling me why it was in my best interest to keep the policy. Why on earth would I believe her advice to be valuable? Six or eight months ago she wanted us to start putting money into investments regularly, and actually told me that my stance on financial risk was too conservative. We were a breath away from a giant economic downturn and she had no idea. Isn't that her job?

Anyway I emailed her back but didn't rip her head off, and we're cancelling the policy. Just wanted to get that off my chest. Thanks for listening.