Guzzo the Contrarian

Ben, over at The Consumerist, related to his readers a recent conversation he had with a Goldman Sachs trader. According to an excerpt from his post:

If you don’t shop around for your investments or learn to how to make sure you’re getting the best deal, you do set yourself up to be taken advantage of. If you’re getting into an actively managed fund, you better learn all about fees, loads, 12b1 fees, marketing fees, transaction fees, all the fees in the fee rainbow. Don’t think that because you’re a non-profit all of a sudden everyone puts on their happy hats and kid gloves and is going to help you out.

Ben makes a great point about conducting your own due diligence before investing any of your money or making any financial decisions. It almost goes without saying that no one cares more about your money more than you do.

Along with taking charge of one’s finances, living frugally, shedding debt, saving and investing, that’s one of the main concepts that I promote on Guzzo the Contrarian. So, it pains me when I read about some non-profits irresponsibly turning over their investments to a Wall Street investment bank to manage. One would think that this current financial crisis would have instilled a sense of skepticism of investment banks, but I guess I’m expecting too much.

So, for all you unsophisticated non-profits, READ THE FOLLOWING:

I’m going to go a step further than Ben recommends and say that if you manage the investing on behalf of a non-profit, endowment, foundation or charity, that you avoid the investment bankers altogether and invest your contributors hard-earned dollars with a more investor-friendly firm, such as The Vanguard Group.

The Vanguard Group can provide most of the same services that an investment bank can provide, but they’ll be eager to educate, less-costly, and put your interests ahead of their own.