• Not all financial advice is equally reliable--pick your sources for financial advice carefully.business colleagues preparing for business meeting image by Vladimir Melnik from Fotolia.com
  
  The main risks associated with any financial advice is related precisely to the notion of "risk" itself. Any financial investment has a risk attached to it and profit garnered from that financial investment will be directly related to the risk associated with that investment. For example, if you purchase penny stocks, you may be more likely to lose money than make money; however, your risk is compensated by the potential upside of the investment.
  
  

The Tricky Upside

• Unless the advice you receive comes from a paid source, such as a financial consultant, the major upside of financial advice is that it is free and can make you money if employed properly. For example, if you read daily the freely available online columns at Kiplinger, Forbes, Reuters and other websites dedicated to financial topics, you will enhance your own financial education; however, that financial education can also lead you into a major financial calamity if you are not careful. For example, during the 1990s and into the mid-2000s, most financial advisors and columnists promoted real estate as a smart financial investment; people that followed that freely and commonly available advice into 2007 lost much of their net worth as the housing market collapsed.
  
  

The Tricky Downside

• Financial advice is just that: advice. Financial advice comes with no strings attached and can make or break your financial portfolio if misapplied. Moreover, financial advice tells you how to take or manage financial risk, but it often cannot tell you explicitly how to make money from the market or manage your emotions. For example, according to investor Jason Zweig, people often know that they should "buy low and sell high" in the market; however, neurologically, our emotions often get in the way of our investing. As a result, people often want to hold a stock until it falls and they want to buy a stock that looks like a winner, which results in a "sell low and buy high" strategy--the sure way to lose in the market.
  
  

The Unknown Future

• Adding risk to all financial advice is the fact that you cannot confirm the value of the advice in the present. For example, if your stock broker tells you to buy "Stock X," you do not actually know whether that stock is worth buying, regardless of the credibility of the stock broker. That stock could possibly plummet if the associated company has a hidden debt crisis, is overtaken suddenly by a competitor, or is hit with a market-wide recession. Thus, according to investor Jack Schwager, the most successful finance professionals are those that conduct their own research and take all financial advice with a grain of salt.