August 12, 2016

Why even the best investing advice may be wrong

“Sell everything” or “buy now” or “head for gold” makes great headlines, but isn’t great strategy for individual investors.

The reason isn’t that the market observers are reading fluctuations and trends differently than individuals, using specific technical analysis or analyzing contrarily the fundamentals. Nor is it that the experts are always wrong, no matter how popular that sentiment might be.

The issue is that money managers run money, while individual investors run their own lives.

The experts you see, hear and read about live by the rules of an investment mandate and die if they can’t keep up with the competition, while investors live with their decisions and modify their strategies because they can’t afford to fall.

Thus, whenever you hear a market forecast and recommendation on what to do next, it pays to consider the differences between you and the guy making the recommendation.

Here are the key points to keep in mind:


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