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I think most behavioral finance people would agree 95% of Americans should follow this "dogma" because the biggest risk for them is making dumb speculative inve
by hunter23 9y ago
I think most behavioral finance people would agree 95% of Americans should follow this "dogma" because the biggest risk for them is making dumb speculative investments.
The top 5% can approach investing with a more personalized strategy, but for most of us, esp. those who don't give a damn what a stock is, this advice is pretty sound.
- jjeaff 9y agoI would say more like less than 1% of us should make more complicated investments than index. And that is generous, considering that there are much fewer people than that in the US today that have made consistent money picking winners and losers. Almost anyone you know that makes a consistent living in the stock market is actually making money through commissions and management fees.
- opportune 9y agoThe entire point of a hedge fund is to do this for people, for a fee. An index fund, on the other hand, is simply a direct purchase of stocks. 95% of Americans should not be blindly investing in indices because that would completely divorce the index constituents' valuations from their fundamentals - and as a result, when this is corrected, a lot of people would lose a lot of money.