The Problem and Investor’s Concern
Myths of Investing
#1 The Herd Mentality
- The whole follow the herd mentality like lemmings over a cliff and doing what everyone else does only led the bigmoney on Wall Street and Bay Street that is mostly tied up in mutual funds and hedge funds to also fall off the cliff.
- Market emotions cause the herd to make the wrong investments at the wrong time.
#2 Buy and Hold
- Even when the markets are going down mutual funds and money managers cannot go to cash. The majority of investors sold at the bottom, bought near the top, and sold again at the bottom.
- Past buy & hold strategies do not address the changing market realities in difficult equity & bond markets.
#3 Only Stock and Bonds
- But where then do we go when stocks or bonds are weak. Most portfolio managers will not go to cash if necessary as they are mandated to be invested at all times.
- Diversification failed to meet investor’s expectations.
#4 Taking a Defensive Positio
- Most pension fund, mutual fund and other money managers are mandated to be fully invested in stocks at all times. By taking refuge only in defensive stocks during weak markets however, as opposed to the opportunity available in other asset classes including cash, may result in compounding losses.What will continue to cause investors to be the victims of wealth destruction and become un-Retireable?
It will be the 4 Myths of Investing and increased volatility – we need a better solution.
Next: Our Unique Solution