Death of the American Investor. Nico R. Willis

      Death of the American Investor

      The Emergence of a New Global eShareholder

      by

      Nico R. Willis

      Copyright 2011 NetWorth Publications LLC,

      All rights reserved.

      Published in eBook format by NetWorth Publications, LLC

      Converted by http://www.eBookIt.com

      ISBN-13: 978-0-6154-5887-8

      No part of this publication many be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, please write to NetWorth Publications, LLC, 1661 E. Camelback Rd., Suite 200, Phoenix, AZ 85016.

      602-222-6380 Office

      602-222-6383 Fax

      Praise For

      Nico R. Willis’s

      Death of the American Investor

      “Finally a common sense book to help investors after one of the most difficult investment decade in the past fifty years.”

      —ROD HAGENBUCH, author of “Investment Survival” and “Becoming a Life Advisor” world-famous philosopher

      “Nico provides a keen perspective of the inner workings of the securities industry and the direct and unintended impact on shareholders. His views about electronic communication with shareholders for investing and maintaining securities assets is spot-on.”

      —JOSEPH TREZZA, President,

      Seagull Securities Consulting, Inc.

      “Death of the American Investor has accurately described the changed environment for investors and problems they have confronted. He has provided an excellent road map going forward.”

      —LESLIE ALLEYNE, Individual Investor

      “Nico has captured the essence of the dramatic changes in investing over the past two decades, the impact on investors and what to do about it.”

      —MICHAEL GERITY, Managing Director of

      Israel & Gerity, PLLC and Individual Investor

      To my son, Caiden

      This publication is intended to provide general financial information aimed at educating the reader on the subject matter covered. While every effort has been made to ensure the accuracy, completeness and timeliness of the material presented, due to the rapidly and continuously changing nature of financial matters, the authors cannot make any guarantees as to these matters. Furthermore, the information provided, as well as any recommendations, cannot take into account all of the unique circumstances present in a reader’s financial picture, and nothing contained in this publication should be considered as personalized investment advice tailored to the individual needs of the reader. The information contained in this book should not serve as the sole or primary basis for making investment decisions, and readers should consult with a financial advisor if they are seeking individualized investing advice and counseling. Under no circumstances are the authors of this publication giving investment advice, tax advice, legal advice, or other professional advice. You should always seek the assistance of a professional for advice on investments, tax, the law, or other such professional matters.

      Acknowledgments

      Marisa Diaz – thank you to Marisa Diaz for which this book would not be possible without your invaluable writing contribution and your unique ability to translate highly complex financial concepts into a fun way of learning.

      Beth McRae – thank you to Beth McRae who called one day and told me I needed to write a book and contributed to the effort.

      Elizabeth Day – thank you to Elizabeth Day for her editing contributions.

      Laura Bramly – thank you to Laura Bramly, a communications consultant, who contributed her project coordination, writing, and editing skills to the book.

      Anthony Tomei – for providing marketing expertise and social media campaign strategies.

      1160 Design – thanks to the team at 1106 Design for designing the book’s interior.

      Steph Sweet – many thanks for creating the graphs, tables, and other graphic elements in the book.

      A&A Printing – many thanks to A&A Printing, who prints in the United States and can be reached at printshopcentral.com.

      Mike Pickett – thank you for the valuable insight and expertise in today’s tax environment for investors.

      David Dees – thank you to David Dees at deesillustration.com for designing and illustrating the book cover art.

      Christian Diaz – thank you to Christian Diaz for helping me to explore beyond what I thought I already knew.

      Kevin Steele – thank you to Kevin Steele for a second look at the Federal Reserve Bank.

      NetWorth Services – thank you to the entire team at NetWorth Services for their focus and continued commitment, ensuring that the company remains competitive in our business. They gave me the freedom to pursue this book and educate investors in these changing and uncertain times.

      INTRODUCTION

      “The investor of today does not profit from yesterday’s growth.”

      —Warren Buffett

      The literary market is filled with investment books, some good, some bad, most talking about the same old investment strategies. I started my career as an investment broker and then as a vice president at a well-known brokerage firm for many years, which provided me with an up-close-and-personal insider’s view of the operations of the stock market. I read my fair share of those books as an investment professional and as an investor myself. I always felt that the books that were meant for the individual investor were missing much of the underlying information that was critical to actually succeeding in the market.

      It was also during this time in my career that I realized that average American Investors are at a disadvantage in calculating their adjusted cost basis for their securities. Investors have always been responsible for reporting their capital gains on the Schedule D correctly, yet they were at a disadvantage by not having access to all of the information needed to properly calculate their cost basis. So in response, I began a software company that markets an automated solution to everyday taxpayers so that they can access the same information the professionals have.

      Even though I have been in the brokerage business for some time now, the evolution of the market, the recent financial crisis, and other drastic paradigm shifts inspired me to once again bring the average American Investor on the inside, so I wrote Death of the American Investor.

      History can provide us with so much valuable information, but we don’t seem to take advantage of it. Do we just have short memories, or are emotions like greed so strong that they supersede all rational thought and carry us to the brink of disaster, taking all willing parties with us?

      Death of the American Investor is also about rebirth. It is about a Phoenix bird rising from the ashes of financial disaster. It is about a world where investors are empowered to take control of their investments and, with technologically advanced tools, make solid, strong, sound decisions that will provide them with prosperous futures.

      In this book, we will travel through time and look at the history of the stock market. We will examine the current environment for investors and review the insidious investment scams and Ponzi schemes that have rattled the collective American mindset, not to mention the numerous financial institutional failures. We will take a look at the trend toward a paperless society and