A word of caution. When you hear investment advice from a bobbing head on TV, take it with a grain of salt. The same goes for radio investment guys. And for advice from some of the advisors in newspapers and magazines. Take a grain of salt. When you get investment advice from an academic, take two.

The reason is simple. Very few of them have ever worked as advisors. Few have worked with clients. Few have seen how their advice pans out. Few have held the hands of frightened investors. Few have fielded the nasty phone calls from investors who lost money. Few have dealt with the whacky behavior of some clients.

Until someone has, he cannot make a good advisor on the air or in print. Because knowledge of investments is no where near enough. Someone who advises on health matters who never met a patient is not an expert. A medical professor who never sees patients is not an expert. When it comes to advising us on health matters, he isn’t.

Years ago two business economics profs asked me to guest-lecture their classes. They taught from textbooks. One of them told students that investors normally took certain steps when they planned their investments.

“Not on your life,” I told the students. “I have known thousands of investors. Not a single one did what your textbook suggests.”  The profs never invited me back.