If there is one thing that I learned while earning my degree in Finance is that nobody really knows what they are doing when it comes to picking stocks. There are plenty of people who claim to know what is best and when times are good they do look like the geniuses they claim to be; but when times are bad these so card geniuses true colors come out and the world get to see how smart they really are. No doubt this latest financial meltdown has shown a us how smart some of these people really are.
In fact only 25% of professional money managers are able to outperform the market on average every single year during good times and bad. That means that 75% of professional money managers underperform the market every single year, year after year. Vegas offers better odds then that. Putting your money on black on the roulette wheel at least gives you a 50-50 shot with these so called pros your only getting a 25% chance at beating the market. I don’t understand why people pay such a high price for financial advice that will earn them less money than if they would have just bought themselves an index fund matching the market. Not only would it be a whole lot cheaper but chances are you would earn a better return.
So when my friends ask me for finacial advice the first thing I tell them is to stay away from so called professional money managers. Get an online trading account and just buy and index fund that matches you desired level of risk and sit back and let the market do the work for you. Don’t waste your money on someone who will just end up losing you money.
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