“Let’s see what we can do for you,” cooed the suavely dressed advisor. He showed Selena some mutual fund performance charts. Each of the funds rocked. “You could retire well on these kinds of profits,” he said. He was trying to sell Selena on his fund picking magic.

There’s a group of investment firms that I call the Septic Seven. Each of them targets the millions of expatriates who live worldwide. For example, if a businessperson, teacher or an employee from an oil and gas firm moves to the Middle East, within a week, a representative from one of the Septic Seven firms usually finds their number and makes a cold call.

Investing with them puts the expat on track for a major train wreck. Fees are nosebleed high. In many cases, the first 18 months of investment deposits attract costs that are higher than 9 percent per year. Money invested after the first 18 months usually carries expenses that are higher than 4 percent per year. Investors who catch on to the fee-burdened riptide get tossed on the rocks. If they try to sell before a predetermined date (which is often 25 years into the future) they pay a massive penalty. In some cases, it’s higher than 80 percent of their portfolio’s value.

The silver tongues that sell these products say nothing of the fees or the redemption penalties. They get paid huge sums for pushing poor products. Some make more than $1 million a year in commissions. They produce videos like the 10 Habits of Successful Financial Advisors.

They’re all about commissions. Investors get the shaft.

Fund selections, however, can hurt a lot more than fees. I’ve spoken to audiences about these products in Singapore, Malaysia, Thailand, Vietnam, Indonesia, Mexico, Germany, Switzerland, Spain, the Czech Republic, Dubai and Oman. I’ve asked dozens of investors to send me copies of their accounts. None appear to hold globally diversified portfolios. They’re concentrated in yesterday’s hot sectors. That’s how to impress a client and earn a fat commission. Nearly all have lost money. None that I have seen have beaten inflation.

You might not think this is relevant if you live in the United States. But it is. There’s much that we can learn from the world’s worst financial advisors.

Selena first met her advisor in January 2008. He was pushing three funds. One of them tracked the price of gold. A second managed fund included Latin American stocks. The third contained Chinese stocks.

Each fund had rocketed over the previous three years. Gold had risen 93 percent. Latin American stocks had climbed 229 percent. Chinese stocks had soared 222 percent.

“Chinese stocks,” said the advisor, “have the best potential.” That’s why he put 50 percent of her money in the Chinese fund. Latin American stocks had knocked out the lights, so he put 30 percent of her money in the Latin American fund. He put the remaining 20 percent in gold because it had gained just 93 percent. In the chart below, I’ve shown the performance (2005-2008) of each sector using iShares ETFs. Such charts can be weapons for commission hungry sharks. But they also provide lessons for DIY investors. Past performance and predictions can tempt almost anyone.

Performance of Gold (IAU), Latin American Stocks (ILF) and Chinese Stocks (MCHI)

Performance of Gold (IAU), Latin American Stocks (ILF) and Chinese Stocks (MCHI)
Source: Morningstar.com; using iShares ETFs

It has been eight years since Selena first invested. High fees have trashed her portfolio. Poor fund selections have made it worse. Chinese stocks (which made up 50 percent of her portfolio) are down 33 percent. Latin American stocks have cratered 45 percent. Gold–to which the advisor gave the smallest allocation–is up 50 percent.

Nobody knew that January 2008 would have been a bad time to lump money in the markets. But stocks have risen since then. From January 2008 to September 19, 2016, global stocks have gained 37 percent. U.S. stocks have gained 80 percent.

Performance Of U.S. Stock Index And Global Stock Index
January 2008 – September 2016

Performance Of U.S. Stock Index And Global Stock Index -January 2008 – September 2016
Source: Portfoliovisualizer.com

Selena wasn’t that lucky. Not counting fees, her investment sectors are down 10 percent since January 2008. Her actual portfolio should have done better because she added money every month. Dollar-cost averaging allowed her to pay a lower-than-average price for each of her mutual funds. But her actual portfolio, after fees, is down 27 percent.

So, what are the Septic Seven chauffeurs pushing now? As always, they’re looking through the rearview mirror. To them, U.S. stock market charts now look the best. They’re filling new client portfolios with U.S. stock funds. They aren’t bothering with international funds. They’re shunning emerging markets. They almost never add bonds.

This doesn’t mean that U.S. stocks will tank. But there’s a lesson to be learned. Build a diversified portfolio. Include U.S. stocks, international stocks and bonds. Forget about predictions, silver tongues and temptations from the past. Every sector has its years in the sun. And its time in the shadows. Diversify. Don’t mess around.

We can learn a lot from the world’s worst financial advisors.

Andrew Hallam is a Digital Nomad. He’s the author of the bestseller, Millionaire Teacher and The Global Expatriate's Guide to Investing: From Millionaire Teacher to Millionaire Expat.