In Whoopi Goldberg’s film ’Jumping Jack Flash’ there is a scene where she is trying to figure out what the words are to the title song from Mick Jagger’s mumbled singing. “Mick! Speak English!” she yells in exasperation. This is something that virtually all investors should do. If an investor is dealing with a financial services professional, she/he needs to insist that person explain things in plain English.
Financial services, like any profession has it’s own vocabulary. Unfortunately, often people dealing with clients get caught up in the vocabulary. They’ll talk about a ‘10 basis points’ instead of 1/10 of 1%. The problem this causes is that we don’t like to feel stupid. So instead of asking “What the heck is a basis point?”, we nod and think “I have no idea what this guy is talking about”.
Do not do that. It’s your money. You’ve worked hard for it your whole life. Yeah, you may need to admit to some ignorance. So what? If the person you are dealing with chuckles because you don’t understand his nomenclature, walk away. You are hiring a professional because they do know what this stuff means. Don’t let yourself be buffaloed by someone because you don’t know the special vocabulary. Ask them to explain what they are talking about. And if you still don’t understand, again walk away. You don’t have to become an expert. But you do need to be in sync with where you money is being invested. Insist that Mick speak English.