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Rich and Co.

Oh Oh – “”We found that financial experts are no different from peer investors: they do not have ability to pick outperforming stocks, they do not manage risk of their portfolios in better ways, and they trade as often as other investors,” Bodmaruk said. “The only time experts do better than non-experts is when they have access to better information stemming from their workplace.”

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The study implies that for an average investor, particularly for wealthy, educated investors, paying for financial advice or investing in actively managed [2] is not worth it.

“Most experts will not help you improve your performance beyond what could be achieved by investing in passive indexes,”

“Outperforming the stock market is very difficult and the overwhelming majority of investors, including experts, do not have the skill to do it,” Bodnaruk said. “Markets by and large are efficient to the degree that very few investors can consistently perform better than a fair reward for the risk assumed. Given this, [4] should not chase expert talent, but instead focus on passive strategies which help minimize trading costs.”

Read more at: http://phys.org/news/2014-11-financial-experts-expert-notre-dame.html#jCp

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Written by Rich and Co.

October 15, 2015 at 6:59 pm

Posted in Uncategorized

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