Answer: You’re not dealing with a financial advisor who has your best interests at heart. You’re dealing with a salesman who is mostly, if not solely, concerned about the commission he’s going to earn from selling you an insurance or investment product should you take his unsound advice.

Borrowing to invest is a risky strategy. Putting your home on the line to do so is particularly unwise. The interest rates on your home equity loan may be low now, but the rate is variable and can rise substantially. If you can’t make the payments, you could lose your home.

If he were honest, this is the pitch he would have made to you: “You don’t make enough money to afford the product I want to sell to you. Therefore, I want you to put your home at risk so I can make this commission. Your borrowing costs and the costs of this investment will likely eat up most of your returns, but at least I’ll have my money.”

If he’s selling insurance, you should report him to your state’s insurance commissioner. If he’s selling stocks or other investments, report him to the Securities and Exchange Commission.

If he has any professional investment credentials — which isn’t likely, but anything is possible — you should report him to the organizations that granted those.

Remember that anyone can call himself or herself a financial advisor. There are no education, experience or ethics requirements. If you want someone who meets higher standards, look for a certified financial planner or a personal financial specialist (a designation given to certified public accountants with financial planning training).

And pay attention to how the planner is paid. A fee-only planner accepts only the fees you pay, while a “fee-based” planner may accept commissions from the products he or she sells. If you don’t want commissions to affect the advice you get, consider a fee-only planner.

You should take a few minutes to read his last column for the Times, because it offers a sense of perspective that’s too often missing from today’s business coverage. He writes:

I’m stepping away at a time that is strikingly reminiscent of my first few years in the business of covering financial markets and the economy. That was 1979-82, in what was then considered the worst U.S. economy since the Great Depression.

Sound familiar?

…

Many Americans’ attitude toward the stock market was exactly the same then as now. In 1979 the market was mistrusted or outright despised. What was the point of owning stocks? The Dow Jones industrial average was no higher in 1979 than it had been in 1964.

The rest of that story is that after so many years of pinging between 600 and 1,000, the Dow Jones Industrial Average in the 1980s finally started its long, explosive climb upwards. (The DJIA closed today at 11,555.)

Many of you reading this probably don’t remember those years, and some of you who do are convinced it’s different this time. Like Tom, I’ve been hearing the doom-and-gloomers predict the end of the economic world for decades now. And whaddya know…we’re still here.

This is not to downplay the severe financial beating so many have experienced. There are people who have lost everything they had, and who aren’t likely to get all or even most of it back. The unemployment rate is scary and so is the all the debt we’ve accrued, as people and as nations.

But we have survived worse. I think we will again.

Answer: Blame the economy. Both individuals and businesses are wary about borrowing money. Less demand typically drives down the cost of a product. The product in this case is loans, and the price is the interest rate. With little demand for loans, banks don’t need to compete much for depositor funds and so aren’t paying much on their deposit accounts.

Another big factor is the Federal Reserve, which is keeping interest rates low to try to stimulate borrowing, spending and the economy. The Fed’s big fear is that higher interest rates would choke off the economy’s recovery and send us spiraling into another recession.

How long will this low-interest period last? Nobody knows. We could see higher interest rates if the economy really takes off. In that case, higher demand for loans probably would bid up interest rates and the Fed would switch its focus to containing inflation, which typically means it would try to raise rates further. Many economists are predicting a slow recovery, however, which means low savings account rates are likely to be with us for a while.

In the meantime, you can look for slightly higher rates at sites like MoneyRates (http://www.money-rates.com) and Bankrate.com. Recently the national average for one-year certificates of deposit was under 0.5%, but several financial institutions on those sites were offering rates above 1%.

If you’re being offered rates much above that level, you’re either dealing with a riskier investment or being asked to lock up your money for a considerable period. Neither is a good idea if this money is your emergency fund or you otherwise need it to be safe and accessible.

Pieces like this remind me of how frequently we misjudge financial risk as well. Many people mistakenly think:

• Their company’s stock is less risky than a diversified mutual fund
• Stocks are less risky when the market’s booming and more risky when it’s falling
• That it’s better to put off investing for retirement when the stock market is volatile (fact is, the market is always volatile, and delays just mean you have to save more or settle for less when you retire).

Other common misjudgments: deciding you don’t need health insurance because you’re currently healthy (when you’re just one accident or illness away from potentially bankrupting bills without it) or following an investment guru because he’s made a good call lately (without checking to see how his last dozen or so predictions panned out).

It’s not easy to be rational in this world, but our financial security depends on it.

Answer: You have sufficient equity in your home to attract plenty of lenders, as long as your credit scores are good. Locking in today’s low interest rates makes sense, but reducing your mortgage balance probably doesn’t.

In the long run, you’re likely to be better off taking maximum advantage of any tax-deductible retirement plans. You’ll get a tax break upfront for your contributions, and the money can grow tax-deferred until retirement. You also should keep an emergency savings cushion equal to at least three months’ expenses — preferably six months’ worth.

You’re taught that if the plane is flying at low speed and starts to shake, you push the nose down. Your instructor takes you up into the sky and puts the plane in a near-stall, over and over again, so you can practice this recovery maneuver until it’s reflexive. Shake, push down. Shake, push down.

Yet now comes information from last week’s terrible commuter plane crash that the pilot seems to have done exactly the opposite–that he pulled the nose up instead of down.

It’s still too early to draw conclusions, of course, but it wouldn’t be the first time a human being panicked and did exactly the wrong thing, with disastrous consequences.

To bring this home: being fearful about your investments is a perfectly human and rational response to the uncertainty in the market and the economy. But some people are letting fear flare into panic. They’ve become hysterical and irrational. They’re convinced the economy is about to collapse and their investments will become worthless. They’re making sudden, radical changes in their portfolios rather than taking a moment to breathe, get unconflicted advice and see the big picture.

When you’re a pilot, you may not have time to reflect. That’s why flight training is so important. As long-term investors, though, we don’t have to make split-second decisions. We can take the time to get it right.