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No. I'm pretty good at financial planning. But what that means is that I'm good at getting standard market returns with acceptable risk. I don't beat the market

by dgacmu 3y ago

No. I'm pretty good at financial planning. But what that means is that I'm good at getting standard market returns with acceptable risk. I don't beat the market or try to - that's not what most financial planning is about. It's about identifying a plan that will help you meet savings and income and retirement goals in a way that is realistic and works for you. Financial planning is much more about seemingly-boring things like tax-advantaged retirement contributions into low-overhead index funds than it is about flashy stock trades. What to hold in your tax-deferred accounts vs taxable. Tax loss harvesting. Roth conversations. Asset allocation. Estate planning. It's really fun, but it's an optimization game, not a gambling game. There are basically a lot of known "right answers" and the trick of financial planning is applying and adapting them to the particulars of someone's situation.

MichaelZuo 3y ago
Why wouldn't folks instead hire the market beating super-genius who could do all of the above, and deliver above market returns yoy, with acceptable risk, if given the choice? I think that's the point the parent was trying to get at, it's an industry where all the best talent never become hireable in the first place.
- dgacmu 3y ago
  Because those people mostly don't exist and you're not given the choice. RenTech exists but has to cap the size of their internal market-beatung fund, because their strategies only scale to a certain extent. They're a hedge fund, not a financial advisor - and they do indeed do what the GP said and just invest for themselves. Almost all other folks out there revert to the mean after a while. But that doesn't mean there aren't good financial advisors. They're not helping you best the market, they're helping you ensure a good financial future within the scope of your existing wealth and income. They do apply their skills to themselves, but you need a job and a big base of money before s&p returns will make you rich. :)
  - MichaelZuo 3y ago
    Right, so the best talent don't ever become available to be hired. Because they would all be occupied working for themselves, or at very select firms, earning way more.

by dgacmu 3y ago

MichaelZuo 3y ago

Why wouldn't folks instead hire the market beating super-genius who could do all of the above, and deliver above market returns yoy, with acceptable risk, if given the choice? I think that's the point the parent was trying to get at, it's an industry where all the best talent never become hireable in the first place.

dgacmu 3y ago
Because those people mostly don't exist and you're not given the choice. RenTech exists but has to cap the size of their internal market-beatung fund, because their strategies only scale to a certain extent. They're a hedge fund, not a financial advisor - and they do indeed do what the GP said and just invest for themselves. Almost all other folks out there revert to the mean after a while. But that doesn't mean there aren't good financial advisors. They're not helping you best the market, they're helping you ensure a good financial future within the scope of your existing wealth and income. They do apply their skills to themselves, but you need a job and a big base of money before s&p returns will make you rich. :)
- MichaelZuo 3y ago
  Right, so the best talent don't ever become available to be hired. Because they would all be occupied working for themselves, or at very select firms, earning way more.