It’s unfortunate that most investors succumb to the sales pitch of brokers and advisers who tell them they can “beat the markets.” If your broker falls into this category (and almost all of them do), ask her to describe her methodology. If it is based on past performance, is she able to predict tomorrow’s news? Since tomorrow’s news is what will affect stock and bond prices, why does looking backward have any predictive value?If there was a reliable way to “beat the market,” you can be sure it would be uncovered by the millions of investors and thousands of academics focused on the market every day. It would also be published in a peer-review journal. I have yet to find any credible evidence of investment expertise permitting anyone to consistently “beat the market.”
I issue the same challenge to brokers every day. Tell me your methodology for beating the market. Demonstrate that it works. I will check it out and will publish the results. I am still waiting for takers.
NO one can predict the future, yet most brokers make you believe they can. If you want a main street solution to a Wall Street problem stop listening to brokers and invest in a globally diversified portfolio.
Please comment or call to discuss how this can help take the stress out of investing.