What If?

http://pivotedmonds.com/

What if one day you find that all you’ve known till now about investing is wrong?

What if all the beliefs and practice of analysis on the market is wrong?

What if this is a conspiracy to keep individual investors like you in the dark?

We have been programmed to accept low returns of 5-10%. Individual investors have also been programmed to believe that going into savings account in a bank with a >1% return makes you an investor, going into the 1% return in fixed deposits makes you a “smarter” investor; going into the few percent return in bonds makes you an “even smarter” investor, going into dividends stocks makes you a “seasoned investor” and that going into buying and selling stocks makes you a “sophisticated investor”. Right? No! You’ll see what I meant by professional later on.

Nobody’s going to admit to all the things mentioned above due to many reasons. But if you think about it, it all makes sense.

In this article I’ll address some issues that piss me off when thinking about it. It is in no way to prove anything. I simply hope that upon reading this post, you’ll be provoked to think critically and take the necessary action to better yourself in terms of financial knowledge. If I can do that to you, I have accomplished my goal in this article.

Mainstream Professionals

Some(though I think it’s most) of the analyst or “professionals” that appear on the media don’t possess knowledge across the categories of financial products. They’re one-trick ponies. Maybe they know some stocks, maybe some bonds. When you ask them what a tick of the S&P’s future represent, they don’t know about it. Or what a call or put is etc. You get my point. Don’t think they know more than you. They actually don’t.

True Professional

A true professional understands all kinds of product in the financial world. Stocks, futures, options, bonds, currencies etc. I don’t consider REITs or ETFs as a class of their own as they trade exactly like a stock. This is THE level to reach in knowledge to be coined a professional. Nothing else.

And when you truly reach this stage, you’ll be pissed when you didn’t beat the index return. I’m not there yet but I’m working my way towards it.

Think 5-12% is impressive? Think again. Don’t stop learning till you reach there!

TAs and FAs

And individual investors have been underperforming for the past 60 years! Ask most people what they know about trading stocks or investing, you’ll often hear fundamental or technical analysis. Think it’s a coincidence why majority of individual investors fail?

Standing on the other side are the professionals. They professionals are the ones who take the other side of the trade the public wants. And what do you know, they have been successful for the past 60 years.

Read more on this in previous posts.

http://www.optionssingapore.com/efficient-market-hypothesis/

http://www.optionssingapore.com/random-walk-hypothesis/

http://www.optionssingapore.com/conventional-wisdom-and-critical-thinking/

Young Investors

To all the young investors, I have a friend who’s my age but his mind is cluttered like an old clogged drain. DON’T LET THAT HAPPEN TO YOU! You’re young. You have time. You have little obligations. You have little to lose. Take the risk. Be open minded. Try out new things. Try out new concepts. That friend of mine was really shocked when I told him that I don’t trade with fundamentals or technicals. After explaining a few times, he still comes back to me telling about TA and FA. I wish he’d just shut up and start taking action. Whatever you believe in doesn’t matter. At least get started!

Again, this is a thought provoking post, nothing to prove. Just hope that there’s some takeaway for you in this short post.

Hit the like and share button for me and leave your comments behind!

To your continuous learning

Trader Pok

The post What If appeared first on Options Rising Star-.