Rule 1: Know thy self.

Selecting a specific financial security isn't entirely straightforward. It's a bit more of a dance; give and take but you lead.

Asking somebody what's the best stock to own is a lot like asking what's the best vehicle to own. I might recommend the 1980's Lotus Turbo Esprit. You may want a vehicle to get to Quimper France from Miami Florida. Knowing that I would suggest sailing Yachts, a private jet, or perhaps booking a cruise depending on your personality and sense of adventure. If instead, you tell me you do delivery of small packages in a dense urban area, I would point you to Cannondale bikes with some off-road suspension features.

So for an advisor to begin to tell you what you should buy, first, you have to decide what you want to do with it.

If you are a thrill-junkie with money to lose and an expectation to win big, you will want stocks that have a normally undesirable high standard deviation of their daily returns.

If you are a stable middle-class worker with a family that has grown a bit too big for you to put all your children throu... Show more...
Selecting an investment (x)

I'm still coding the back end software for the big Outsourced Math LLC project, but I'll say that what we're making is going to mitigate the problems outlined in this episode of @OnPointRadio where they scrutinize #IndexFund #Investing.
Callers to the show raised great points.

Initial Post

About the choice for the Forum's profile image.

It's a well known story in finance courses offered in colleges and universities that a challenge was posed where a drunken monkey throwing darts at the stock listings pages of the Wall Street Journal could do better at building a Portfolio than the top paid money managers in the industry. Depending on when you decide to stop the trials is the main determining factor for who's winning. It's about a coin toss between the record of a random selection and the top managers.

The main reason for this comical outcome is commonly referred to as the Efficient-Market Hypothesis; in brief, about 1,000 analysts (minimum) per stock study that stock daily as their only job, so if anything could change the pricing of that company thousands of people would immediately react to it so the price a ticker is listed at is correct at all times... Show more...
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