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Sound Advice: March 19, 2025

The Unbreakable Investor: Yet Another Dangerous Path To Follow 

Over the last few weeks, I’ve heard a few commercials for a book entitled The Unbreakable Investor, by Charles Payne.  This is one of the many hyped approaches bombarded people on radio and TV.  Though the advertisers would have you believe each of them is the key to the mint, you can certain that they are anything but.  The key beneficiaries are the sponsors, not the members of the public who believe in magic.

The potential risks of following Charles Payne's investment strategy include:

  1. High Risk of Loss: Payne's strategies, as outlined in his materials, acknowledge the possibility of significant losses, including losing the entire investment. His results are not guaranteed, and outcomes can vary widely depending on individual circumstances like education and experience.
  2. Overemphasis on Stock Market: Payne advocates for long-term stock market investments, but critics argue that this approach may not suit all investors, especially those with lower risk tolerance or shorter investment horizons. His focus on stocks, with limited diversification into other asset classes like gold or property, could expose investors to higher volatility.
  3. Simplistic Strategies: Payne promotes simplified approaches such as dollar-cost averaging and investing in familiar companies. Although these methods can be effective for some, they may oversimplify the complexities of financial markets and lead to overconfidence or poor decision-making.
  4. Emotional Decision-Making: Despite Payne's advice to avoid emotional reactions during market downturns, his strategies might not provide enough safeguards for inexperienced investors who could panic during volatile periods.
  5. Options and Speculative Investments: Payne discusses strategies involving options and cryptocurrency, which carry high risks, including the potential for total loss of principal. These speculative investments are not suitable for all investors and require advanced knowledge to execute effectively.  Crypto, really?  Remember the Dutch tulip craze?
  6. Unrealistic Expectations: Payne's promotional materials often highlight "generational opportunities" and significant wealth-building potential, which may set unrealistic expectations for novice investors and lead to disappointment if results fall short.
  7. Past Ethical Concerns: Payne has faced criticism and regulatory scrutiny in the past for allegedly promoting questionable stocks, raising concerns about the credibility of his advice. He has been accused of being a paid stock promoter in the past, using his TV news job to validate his stock-picking prowess while promoting questionable penny stocks. There have been allegations that Payne has engaged in "double dipping" by promoting specific stocks while simultaneously trying to sell his own newsletter.
  8. Regulatory Issues: The SEC has reportedly fined Payne for pumping worthless stocks, raising concerns about his credibility as an investment advisor.

However much folks would like to follow this Pied Piper, the reality is that you’ll do much better investing in low-cost market index ETFs.  None of these gurus can give you better advice.

N. Russell Wayne

Weston, CT  06883

203-895-8877

www.soundasset.blogspot.com

 

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