/biz/ - Business & Finance

How do I get redpilled on this asset class despite reading meme /biz/ charts?

>>1557700
>if thats how you DD
Which part are you referring to, dirty hands? The part where I read scholarly articles or the part where I don't fall for Wall Street myths.

On the other hand, here I am asking for a reasonable response form the guy who thinks that one-month returns put him in the same league as Warren Buffet. So what do I know?

>>1557714
>turn the risk dial up to 11+11, buy some dogs, and pray
Great strategy. CIA approved.

>>1426732
Yawn. Debunking hedge fund performance is old news. Give me a better challenge, please.

>>1115768
Have fun following the lead of hedge fund managers.

>Why not add to your diversified ETF portfolio by buying weakness in certain sectors, like energy and emerging markets, instead of dollar cost averaging the whole thing at the historic peak of the broader index?

You choose your asset allocations based on your risk tolerances, your practical needs, your investment horizon, and your personal goals. Chasing any particular market segments, for any reason, means you're letting the markets dictate your portfolio structure. That's not smart.

Furthermore, there's no evidence that chasing weak sectors leads to greater alpha. Value stocks do not outperform a diversified long-term portfolio (the possible exception being U.S. small-cap value stocks). The segments you mention are just as likely to underperform going forward as anything else.

So, no, a smart investor is not going to overweight into dogs.

>Lastly, for the record, I don't recommend dollar-cost averaging either. That's the third time you've just made up or assumed something. Can you try discussing the actual posts in the thread and not the imaginary voices in your head?

>>984338
>It doesn't make sense that most people with non-finance day jobs would beat the market, they would be beating people who watch stock prices 12 hours a day.
Most people WITH finance day jobs don't beat the market. 98% of professional money managers can't beat a simple Vanguard index over five years, once you deduct their fees. We're talking about people with MBAs from Ivy League schools, nearly infinite resources and research, teams of analysts, and as much capital as they choose to deploy.

There is simply NO evidence that intelligence, skill, education, experience, time, research, resources, or effort has ANY effect on your performance in the markets.

So what accounts for the "superstar" managers or people with gaudy returns? Luck, luck, and a bit more luck. That's just how statistics work: the existence of a lucky outlier doesn't mean that 98% don't fail.

https://www.dimensional.com/famafrench/essays/luck-versus-skill-in-mutual-fund-performance.aspx

So don't listen to bloggers or media types who have a financial interest in getting you to trade the way that makes them money. Don't listen to the Chinese daytraders who lie about their returns and try to make themselves feel better about their failures by getting you to make the same mistakes.

Invest the way that makes YOU money: low-cost long-term highly-diversified buy-and-hold.

>>782337
OK I google "hedge fund compared to vanguard" and got pic related. Should I send this to her?

>>769871

>>746470
>the vast majority of investors are just not intelligent enough
Are the "vast majority" of professional fund managers also too stupid? How about the vast majority of hedge fund managers? The vast majority of Wall Street advisors?

Point me to one piece of evidence, one study, one scintilla of fact that correlates intelligence to performance in the markets. I'll be waiting.

>>681857
>What the fuck do you think a mutual fund manager does? Have academics weighed in on the efficacy of that too?
Yes. Pic related.

>you're the boggle head
>your shitty strategy of "trust someone else to do this for me."
Someone doesn't know much about Boglehead investing principles. Why am I not surprised?

>even if it is luck
My work here is done.

>I'll be rich long before you retire.
I am retired. Are you rich yet?

>>668687
>s getting a financial planner really such a bad plan?
Yes.
>Are you really saying that my brother, who got the same amount of money as me, and is choosing to keep his money in the Vanguard mutual funds, will do just as well as me?
No. I'm saying your brother is approximately 96% likely do better than you.

Financial advisors are a relic of an outdated era when the markets were less accessible (especially bonds) and index funds didn't exist (at least not the low-cost variety popularized by Vanguard). These days, advisors exist only to prey on people too lazy or too scared to manage their own finances.

Head to bogleheads.org, find the Getting Started article, and then keep reading. Research what respected people and researchers have to say about investing long-term in low-cost index funds. Read Vanguards white papers on fees, asset allocation, and diversification. If at the end of the day that doesn't convince you, then you can happily enjoy paying 2% per annum (omgwtfbbq!) to your advisor.

>>623490
>People with a lot of market knowledge and time to dedicate can certainly outperform the index or match it.
Oh really?