How To Change Brokers and Save Your Funds

By Al Thomas

Has your account been losing money lately? Been thinking about changing brokers, money managers or account managers?

I guarantee they are not going to make it easy for you. They are going to give you all kinds of stories that things will get better, this is a correction, the market always comes back, you are in for the long haul, our market manager is one of the best, we out performed the market during the last downturn, etc, etc, etc.

Ask to see their model portfolio for 2000 to 2003. It is possible they may have outperformed one of the major indexes, but they still lost customer money. Don’t let them give you the BS that “we don’t have a model portfolio”. That is a sign they lost customers’ money. The S&P lost 40%. Did they only lose 39%?

That was the start of the first phase of this nasty long term bear market. Both up and down markets usually last for periods of 16-18 years. That’s 16 -18 bull markets going up and 16-18 year bear markets going down. You don’t want to ride this down cycle for the next 10 years, do you?

There are only 2 places for safety now – cash and gold.

But you must get your money out of the hands of any money mangler.

First you will want to fill out the paperwork at a discount broke or bank as a repository for your cash funds. If you have a standard full service broker with Merrill or CITI or AG Edwards, etc. have them send any free cash. This can done in 24 hours; doesn’t mean they will.

It is not a good idea to hold stock thru any bear market even if it is a “good” stock and pays dividends. Everything goes down sympathetically. Cash in a small interest bearing account will make more money and at least you won’t lose it.

If the market drops 40% (and I think it will do worse than that over the next few years) your cash will not have collapsed along with other stocks and mutual funds.

Now that you have removed available cash from the broker or account manager you may then transfer any remaining stocks you wish to keep. No matter how “good” you might think these stocks are you will see them slowly decline. If you finally get the idea it would be a good idea to sell don’t wait for a rally to try to get “even”. That is a loser’s game. Just get out and take the remaining cash for your interest bearing account.

Whatever type of account you might choose be sure it is either insured by a quality company or the FDIC ($100,000 maximum per person in each separate bank). U.S. Treasury Bills and bonds are the safest. The period ahead is not one to strive for income. Concentrate on safety.

In the next few years the stock market will not be a place for investments. Put your money into a safe place for cash.

Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy It!” has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at and discover why he’s the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.