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I see much larger investors daily and it applys to most of then too that go it alone. It's a human nature issue I believe
very few few can have the dual traits needed to do well. . as tracking the money shows most investors are not buy and hold like most of us here . for those that try to time things they need to be the nervous Nellie type to get out before markets fall while good gains are still happening.
then they need nerves of steel to buy in near the bottoms when the word market makes you vomit.
most of those folks do not have dual qualities that go against each other.
the others just panic and sell and do the wrong thing.
so tracking the money flow morningstar and ibbotsen show most of the money fails to even get what the fund got
very few few can have the dual traits needed to do well. . as tracking the money shows most investors are not buy and hold like most of us here . for those that try to time things they need to be the nervous Nellie type to get out before markets fall while good gains are still happening.
then they need nerves of steel to buy in near the bottoms when the word market makes you vomit.
most of those folks do not have dual qualities that go against each other.
the others just panic and sell and do the wrong thing.
so tracking the money flow morningstar and ibbotsen show most of the money fails to even get what the fund got
Or just program a computer to do it for you, as many are doing these days.
Or just program a computer to do it for you, as many are doing these days.
Quote:
Originally Posted by mathjak107
usually folks don't follow it , they are still to much in control to listen to what the software says.
This is exactly correct. The number of people that will follow a program or set a computer program and not interrupt it is pretty low. Most people will cause themselves harm by jumping in and messing it up
Or just program a computer to do it for you, as many are doing these days.
Doesn't change the fact that human emotion is largely uncontrollable. It only takes a panic like the 2008 crisis to take rationality out of people and induce them to intervene whatever investment plan or program they had had.
If you are rational and consistent, you don't need any program. If you aren't, no program can help you.
This is exactly correct. The number of people that will follow a program or set a computer program and not interrupt it is pretty low. Most people will cause themselves harm by jumping in and messing it up
But wouldn't you say that a computer program isn't infallible either? My husband works with machine learning and he's the first to tell you that computers are only as good as the people working with them. Think about it, you guys are saying, "it's human nature", but the quality of the markets are the direct results of human action. So when a bunch of humans get together and do something irrational or unexpected, it can have a very unexpected influence on the market.. is a program always going to predict the instability of collective behavior? It might be able to pick up on patterns, but there is quantitative and qualitative measurement... no computer program is going to beat the best human minds for determining qualitative information and as with all human institutions, at some level there is a great degree of meaning and interpretation. I think that's why people won't trust a program at the end of the day.
But wouldn't you say that a computer program isn't infallible either? My husband works with machine learning and he's the first to tell you that computers are only as good as the people working with them. Think about it, you guys are saying, "it's human nature", but the quality of the markets are the direct results of human action. So when a bunch of humans get together and do something irrational or unexpected, it can have a very unexpected influence on the market.. is a program always going to predict the instability of collective behavior? It might be able to pick up on patterns, but there is quantitative and qualitative measurement... no computer program is going to beat the best human minds for determining qualitative information and as with all human institutions, at some level there is a great degree of meaning and interpretation. I think that's why people won't trust a program at the end of the day.
It depends on what the program is. If it's just reallocating or buying set dollars I don't think it's an issue. If he program is trying to "think" or "predict" it's problematic
But wouldn't you say that a computer program isn't infallible either? My husband works with machine learning and he's the first to tell you that computers are only as good as the people working with them. Think about it, you guys are saying, "it's human nature", but the quality of the markets are the direct results of human action. So when a bunch of humans get together and do something irrational or unexpected, it can have a very unexpected influence on the market.. is a program always going to predict the instability of collective behavior? It might be able to pick up on patterns, but there is quantitative and qualitative measurement... no computer program is going to beat the best human minds for determining qualitative information and as with all human institutions, at some level there is a great degree of meaning and interpretation. I think that's why people won't trust a program at the end of the day.
A computer program doesn't have to beat the best human minds to be successful. It only has to be coded to be consistent and rational.
The most simple program can be: buy one specific low cost index fund and never do anything else, and it will still be better than the average investor.
Using a broker or advisor isn't the worst thing you can do as the great folks at Vanguard, the low cost king say that an advisor net of fees can be worth as much as 1.5-3% per year
To be clear, asset mangers are told to add worth by simply rebalancing and preventing you from doing stupid things like panicking and selling low. If someone thinks they can do this on their own then there's no need for an asset manager who saps 1% per year.
To be clear, asset mangers are told to add worth by simply rebalancing and preventing you from doing stupid things like panicking and selling low. If someone thinks they can do this on their own then there's no need for an asset manager who saps 1% per year.
Whether someone thinks they can do something doesn't have much impact on whether they can actually do it.
Getting an asset manager is a way to make sure you don't hurt yourself.
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