Some Investors Undergo Training to Take Control of Their Financial Destiny

Originally published on, February 21, 2009.

Collapsed stock prices, a reeling economy and double-digit drops in retirement savings accounts have produced more fallout: many investors are questioning conventional wisdom.

Beyond that, they're also taking control over their financial destiny.

"Many people who had brokers managing their investments not only lost 50 percent last year but didn't even get a phone call to let them know," said Ron Booth, president of Online Trading Academy, an Overland Park company that offers educational courses for novices and professionals.

Of course, there will always be people who are not interested in managing their own investments. And many investors have memories of the day-trading frenzy of a few years ago when many individuals tried their hand at this fast-action computerized trading - and lost big.

But from investment clubs with 90,000 members strong nationwide to laid-off workers with newfound time to handle their investments, there's evidence that more people are pursuing the do-it-yourself approach in this turbulent economy.

Some investors say they are fed up paying fees for mediocre investment returns over the past year. The Madoff scandal and other financial meltdowns also have investors wary of trusting Wall Street. Others simply want to be in control of their own financial destiny.

"People come in here and say, 'I could never trade on my own and beat the pros on Wall Street,'b[1]" Booth said. "But E-Trade has 48 million active accounts. I tell them they don't have to beat the pros, just the 48 million other investors who many not be educated."

Business has been brisk since Online Trading Academy began training investors in December. His company offers courses ranging in cost from $50 to $24,000.

"Our students have decided either to do their own investing or trade for a living," Booth said.

The Internet has leveled the playing field by making many of those tools available to the average investor.

"If the Internet didn't exist, I wouldn't be doing this," said Dave Justman, a day trader in Spring Hill.

On the flip side, however, even the strongest proponent of do-it-yourself investing would agree that it may not be for everyone.

"A lot of investors who have tried to do it on their own are now realizing that it's a whole different world out there," said Nedra E. Mitchell, district supervisor for Waddell & Reed in Overland Park. "Even ones who have had some success are handing at least part of their finances over to someone who does this full time and is able to look at it objectively."

Regardless of whether investors decide to do it themselves, it pays to become better educated about investments.

"I think everyone should be as informed as possible about their financial situation," Mitchell said.

Stopping the losses

Bill Johnson of Mission is among several local investors who are using these new opportunities to take charge of their own finances. Like many employees, he invested in the company 401(k) during his career as a rate specialist for YRC Worldwide.

"I had a financial person handling my investments," he said, "but with the market being what it was, I still ended up losing about 25 percent of my money."

When Johnson took early retirement last year after more than 20 years with the company, he thought he could do better on his own. After taking a course at the Online Trading Academy, he is investing his rollover retirement funds.

"Investing is like anything else," he said. "You need to learn what you are doing, or you can get hurt. I basically am a novice. When I went to training, there were students who were pros with years of experience, so it was encouraging to see that they also had things to learn."

Although Johnson is still deciding whether to try his hand at professional trading, he is confident in his ability to make smart decisions with his money.

"I am still studying and figuring out what I am going to do for sure," he said, "but one thing I am going to do is stop the losses and turn it around to where I am making money. You probably are always going to lose money at some point, but you can limit those losses."

Conservative approach

Matt Behounek of Kansas City has never had to worry about what do with a 401(k) rollover.

"I have owned a mortgage company for eight years," he said. "Because I am self-employed and don't have a 401(k), taking charge of my own finances has been second nature."

Behounek has never been comfortable with someone else making decisions about his money. "I didn't feel right about all of the fees I was being charged constantly, even when I lost money," he said.

Behounek has read a number of books about investing and also follows the advice of Jim Cramer, host of "Mad Money" on CNBC. He buys and sells stocks online or by cell phone through an account with Scottrade.

"I'm not an overly aggressive investor," he said. "I have a core group of companies that I follow. I like to own a maximum of about 10 stocks and may hold some of them for up to a year and a half. If I feel the time is right, I will buy, and when they gain a certain percentage, I will sell a portion of them."

Behounek spends four or five hours a week monitoring his investments.

"It always requires doing homework," he said. "My stocks right now are not the high fliers but the slow and steady ones. I like companies such as Wal-Mart, because people will always have to buy groceries."

Certified 'stock geek'

Justman, by contrast, is more aggressive in his approach.

He jumped into professional trading at a challenging time after leaving his job at Sprint Nextel last summer.

"I'm a little bit different in that I left voluntarily," he said. "I left my job on Aug. 22, and two weeks later, the stock market downturn hit."

Justman had always done his own investing, even while working in the corporate world.

"I'm a stock geek, just as some people are computer geeks," he said. "I like the math behind it, and I enjoy sitting down and looking at the charts."

Justman considers himself a technical trader, who moves out of the market at the end of the day.

Although he has traded stocks, commodities and options in the past, Justman now focuses on trading foreign currency. Regardless of the investment option, he encourages others to take charge of their own money.

"Not only can most people do this, but they should," he said.

As testimony, Justman said he produced a 62 percent return on his investments last year.

"The main thing is to control my own destiny," he said. "I plan to get back the money I lost - and more. What I have learned is that nobody else can take better care of my money than I can."

Investing 101

Investment training is like the stock market, with something in every price range, from novice to pro. Among the options available in the Kansas City area:

  • Stock Selection Guide class from BetterInvesting, Feb. 28, Lenexa Community Center, 816-941-9409
  • Conservative Investing for the 21st Century, begins Feb. 25, Longview Community College Community Education, 816-672-2030
  • Basic Investments, begins March 25, Johnson County Community College Continuing Education, 913-469-8500
  • Building Your Financial Portfolio on $25 a Month, UMKC Communiversity, April 14, 816-235-1448
  • Free Half-Day Class, Feb. 26 and Feb. 27; Professional Trader, March 7; Options Trader, March 28; Foreign Exchange Trader, April 25; E-mini Futures, May 11 - Online Trading Academy, 913-956-7050;
  • Investools Introductory Class: Kansas City, May 16; Overland Park, May 17
  • Kansas City Forex Trading Group, forextrading.meetup. com/204
  • Overland Park Day Traders Meetup, daytraders.meetup. com/211

Considering doing it yourself?

Some practical tips for testing the water of do-it-yourself investing:

  • Become educated. "Find someone who is investing successfully - and get proof that they really are successful - and ask them what they did," said Dave Justman of Spring Hill. Learn from books, the Web or classes.
  • Invest some time. "I don't spend more than four or five hours a week now," said Matt Behounek of Kansas City, "but I spent 15 or 20 hours a week when starting out."
  • Shop for bargains. "If a person is willing to do their homework, right now absolutely is a great time to buy," Behounek said.
  • Overcome fear. "Today, my advice is to buy," said Phil Town, author of Rule #1. "But fear is everywhere and, of course, most people will do exactly the opposite of what they should, because they are being afraid instead of rational."
Free Class