Thursday, April 03, 2008

Investing like a fool

I don't want people to think that I'm some retard here who's just prattling around about money and whatnot. I have an MBA and I had a focus on finance. This means I'm a retard with a degree. That aside I think the idea of people investing in stocks unassisted is silly. Here is my problem; investing is a competitive venture, it is also (to a certain extent) a gamble. Of course the more diversified your portfolio the less risk you have by nature of the beast, but it is still a gamble. When I say it is a gamble I don't mean like roulette or blackjack, or even a slot machine, those are games that the house has a percentage on every time. No I'm talking poker, and professional poker at that.
The reason I say this is because there are people who invest for a living. That is there one and only job, they wake up and keep close tabs on the market and they make money. As a private investor you think "I can invest just as well as some wall-street jerk!" and you choose to enter the game. The problem, much like with a poker hustler, is that you can win. I say this is a problem because by getting a few good picks you think your smart stuff, in much the same way that any one can be dealt a winning hand and beat the pro you have beaten those wall-street jerks.
The problem becomes that in the long run you don't have the time to invest in keeping up with day traders because you have a job, or don't have the resources to get the information they have. So here you are trying to compete with the best and the brightest in their field because you have Internet access and a program that "tells you when to buy and sell". It's ridiculous.
What I say is get a professional, sure do your research make sure that your investment adviser isn't an idiot (much like you would want to make sure you have a competent doctor, attorney, or drug dealer). If you have a competent person working for you they will be able to do professionally what you do as a hobby, and in the end I think you will be happier with the end result. The reality is if you purchase stock on your own or with an adviser you will have to pay commission fee's, there is no way around it. So why not pay commission fee's to someone who is invested in helping yo to invest?

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