'Pundits' who advise all to make value long term investments when asked about the recent crash that wiped out long gains responded by coining another term for it...' a lost decade'. Well, you would feel the meaning of this term truely only if you were planning retirement and suddenly you see your investment built over a life time just wiped out into thin air.
As my concluding post in the series let me summarise why i think retail investing is a goner:
1. Apparent end of the long term investing approach in favour of active trading thus tilting the balance of effort return ratio unfavourably for a retail investor
2. Emergence of giant sized hedge funds and money managers with huge sway on stocks and direction of the market
3. Creation of a plethora of new complex financial instruments making the game more difficult and for the knowledgeable few
As somebody wanting to make money from a rising market wouldn't it be much simpler then to hand over your money to one of these savvy money managers? I certainly am tending to believe so. (Except you might want to do some research in choosing one wisely!!)
The only charm in retail investing left is now quiet akin to gambling and picking out the winning horses. You get a rush, a sense of having been proven right. But just like gambling that victory ain't gonna last long.
So go into retail investing directly knowing that you are making a gamble, play it like a sport, play it only with surplus cash and know when to say adios amigos.
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2 comments:
So you seem to be favoring more of actively managed funds rather than just index funds?
Yes, i favour actively managed funds over index funds.
Composition of index funds( stocks making up an index) is too static to capture the rapidly evolving changes on main street.
Also Index funds tend to attach greater weight in favour of high price stocks.
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