Jon Dowat Attorney at Law helps as Attorney and Financial Advisor

With the unstable economy making financial planning and allocation a matter of stress, here is one Jon Dowat , a bankruptcy and tax lawyer who with his uniquely named firm Thinking Out of the Box, Inc working out of Naperville, gives counsel to individuals seeking financial investment services or facing overwhelming debts.

Dowat was merely 23 years old when he started as an insurance agent. After a while, he branched into selling investments and that led to selling tax components and “from there I learned tax laws and helped people prepare their taxes. I also went to law school part time and graduated in 4 years,” says Dowat. He started doing the same financial business that the was doing earlier but now he was more concerned with helping people with business bankruptcy , corporate reorganization and that’s what made him reach where he is today.

Dowat gives us a few insights about the true color of the world of money and investments, the risks involved, the psychology of the investors and what makes them repent on their losses. Dowat recollects that it was back in 1983 when he got his broker’s license. At that time, there were only a very small percentage of US citizens who invested in stocks and there were only around 1200 mutual funds.

Today in 2014 , there are about 21000 mutual funds. “I might not be technically correct but what I mean is that there are lots of mutual funds and most of them are pretty much the same,” adds Dower.

He moves on to say that people pay millions to professional managers to handle the accounts of their investments profiles but according to his personal opinion, the job that they do isn’t that complicated at all. “What I mean by this is that by paying the management fees to mutual fund companies, people tend to cut down their risks but with simple techniques which people can do by themselves if they invest the same in the money market by putting the money for a period of six months and then taking back for another six months, they can cut down their risks by half and that can exceed performance of mutual funds by 88%. Moreover, one does not have to pay any money to mutual fund firms who promise to help by giving exclusive techniques so that an investor can garner higher profits than anybody else,” adds Dowat. Although, it is a crude technique without any frills attached to it but with this, on can still beat the professionally managed mutual funds.

Mutual funds are all about sales people who tend to mislead the investors/ clients by telling them the possibilities of generating profits and never telling about the risks associated with them. There are often scopes of higher returns, but there are higher risks attached to them also. On the contrary, using the crude yet smart technique as mentioned above, one can realize higher returns without undergoing higher risks. “I guess, that is a better way in the long run,” opines Dowat.

He also believes that in investments, it is important to ensure or protect returns once you have earned it. It is like taking 2 steps forward and 3 three steps back. “Where I stand out is that I offer services to clients in all these areas. A law firm allows a client’s situation to be analyzed in terms of ecology,” says Dowat

When asked about the most favored paves where people should concentrate on investment their cash, Dowat says that historically the best place to invest was real estate and “I say this’ because that’s past tense. Certain government policies, changes in demographics and economy made real estate not that great an investment anymore. Other than that, what gave highest returns was the stock markets, and this has been proven over time. But again during various parts of history, the market has behaved irrationally and gone negative, and people have lost lots of money. During the last 50 yrs, a portfolio lost 7% over a period of 5 years. This is the weakest point of all investments. It never speaks about your risks,” adds Dowat.

Most investment managers feel that it is more attractive to talk about the profits. It has been perceived that most people don’t review the past of the stocks. It is essential to do so because it is the past that indicates the behavior of the future. So when investment professionals present an exciting sales pitch, it is mandatory to take the degree of risks involved in the process. “You will hear most of them saying that if an individual invests a certain sum of money in mutual funds for a fixed number of years, for example, he or she does not have to bother about the market going up and down in between because when the fund matures, over all, the person will gain in totality,” Dowat sets an example. However, Dowat observes that much of the fundamentals are wrong here. For instance, Dowat says that if people invests a principal amount and locks it for a number of years and then say the stock market crashes by 20%, this means that a person has lost on his principal amount in the first place. So, now he cannot aim at gaining 20%, but much more than that as he has to bring up his principle sum. On top of that, as he pins his hopes in getting money to cover up the losses, he has to keep in mind that he is losing years in the meantime during which he is getting no money at all.

Most investment professionals would talk about managing the risks so that an investor in concern does not make losses. They follow what is known as the Martin portfolio theory for which the creator won the Nobel prize too. This portfolio follows a simple theory of diversifying one’s money into different stocks which are not co-related to one another so that even if one goes down, it won’t have a direct effect on any of the others because of their distinctiveness. But when the market crashed in 2000, this theory proved useless during general market downturn. People still lost 70% of their money. A better way to handle is to find more creative and smarter solutions. So if an investor has 20 billion amount of money, that person should hire a risk manger who would use certain techniques in the market to protect him from making losses and ensure high returns. I investments, it is essential to ensure your investments just like anything else.

For more information you can contact Jon Dowat at