2 ms·
As always do your own research before you actually put any money into anything. For most people, trying to do this research would be a waste of time and maybe
by dfxm12 3y ago
As always do your own research before you actually put any money into anything.
For most people, trying to do this research would be a waste of time and maybe do more harm than good. This is all very complex and esoteric, not comprehensible by a lay person, even if you can tell the truth from the marketing speak. I think telling someone to do their own research could make people more susceptible to scams.
- seanhunter 3y agoIf you find it complex and esoteric you shouldn’t be putting your money into it. As Warren Buffet said if he’s in an investment meeting and someone starts using calculus he keeps one hand on his wallet and heads for the door.
- dfxm12 3y agoI disagree with this advice, too. Most people have no formal training in this. That doesn't mean they shouldn't invest. Gatekeeping investments is also an issue contributing to the systemic class immobility in the US, but I supposed that's another issue. In the same way, my dad isn't an expert in buying or using computers. This doesn't mean he shouldn't buy one, or wouldn't get use out of one. He knows he can ask me for advice or give me a budget and I'll just take care of it for him.
- seanhunter 3y agoOf course, but that’s not at all what that advice is saying and I think you know that. He (and I) is not saying don’t invest. He (and I) is saying don’t invest in products you don’t understand. Invest in stocks in real businesses where you can see how and why they make money. Invest in low-cost index funds that (on average) give a really good return over time. Don’t invest in fancy structured products, hedge funds, options strategies etc unless you are able to understand the strategy and why it makes money, what it’s volatility is etc. That isn’t gatekeeping, it’s a simple defense against getting ripped off while also allowing you to invest in the things that have historically given the best returns over time (especially risk-adjusted).
- munificent 3y agoI invest in low-cost index funds, but I'd be lying if I said I understood them. I certainly don't really understand money market funds, and those are supposed to be the most reliable, safest investments out there. Hell, I don't really understand how a car is made, and I invest my life in it every time I drive one. I don't think that advice makes a lot of sense. People in modern society rely on the specialized expertise of others every day. A better way to phrase this is "don't invest in products you don't trust, and understand why you should or shouldn't trust a particular product."
- motoxpro 3y ago100%. This is so intellectually honest. Most things in the world are exceedingly complex and it’s more about the narrative than anything else.