No need to pay "financial advisors"


UncleFai

Senior Member
Mar 10, 2010
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#1
http://www.economist.com/news/finan...are-more-influential-most-people-think-wisdom

"Why do retail investors have such a bad reputation? Part of the reason must be the propaganda put about by the finance profession: if the average guy realised he was financially shrewd, he would have no need to pay 1-2 percentage points a year to have his money handled by a fund manager."
 

Shizuma

Senior Member
Mar 19, 2012
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#2
the question then is, are retail investors themselves shrewd?
even myself a ex stockbroker (staff dealer ) also make bad trades falling for the same old market psychology demons of fear and greed.

anyone truly a finance whiz would be taking a business loan I raising private equity with investment banks to run a nice high margin operation instead of soliciting investment
 

UncleFai

Senior Member
Mar 10, 2010
4,451
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Singapore
#3
the question then is, are retail investors themselves shrewd? even myself a ex stockbroker (staff dealer ) also make bad trades falling for the same old market psychology demons of fear and greed. anyone truly a finance whiz would be taking a business loan I raising private equity with investment banks to run a nice high margin operation instead of soliciting investment
As the article points out, experts are no more immune to bad trades than retail investors, I.e., no diff.
 

Octarine

Moderator
Staff member
Jan 3, 2008
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#4
As the article points out, experts are no more immune to bad trades than retail investors, I.e., no diff.
Experts have never been immune to making wrong decisions. The history is full of bankrupt experts.
The difference today is: every wrong decision becomes visible much faster and gets amplified much more than it was in the past. Even the article suggests that these "findings" are not something entirely new:
The study finds that older (over 35), wealthier and better-educated (with at least a high-school diploma) investors are most likely to have an impact on trading volume—hardly surprising, as those are the people who are most likely to own stocks. The paper also finds that the stocks most affected by retail investors’ beliefs are the blue chips, the ones most likely to be of interest to the general public.
Another point to note: Investing one's own money naturally comes with a wee bit more care and attention than playing poker with other people's money. Especially if the bonus for the latter ones is guaranteed, more or less.
 

Prismatic

Senior Member
Feb 25, 2003
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#5
As I quoted in another thread:
The golden truth: No one cares more about your money than yourself. If there are people that do, that's only because they want to make your money, their money.
However, I think regardless of using a financial advisor or not, if you looking to invest your money, you should have realistic expectations of your returns. You could get modestly rich from trading stocks if you are prudent and disciplined. But if you are looking to be Buffett-rich; sorry that's not likely to happen. Simply because the odds are stacked against you for successive trade gains.
 

Shizuma

Senior Member
Mar 19, 2012
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#6
As I quoted in another thread:


However, I think regardless of using a financial advisor or not, if you looking to invest your money, you should have realistic expectations of your returns. You could get modestly rich from trading stocks if you are prudent and disciplined. But if you are looking to be Buffett-rich; sorry that's not likely to happen. Simply because the odds are stacked against you for successive trade gains.
there is always accumulative leveraged foreign exchange carry trade... increase position size with each interest payout
 

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