Use research to come to an investment decision, avoid being a sheep
Maybe avoid is the wrong word. More like don’t blindly follow. I am talking about information friends,
clients, family, etc. use as a justification
why they (and you) should invest in ABC.
The following should give you pause, as they are fairly weak
justifications:
- Advice from a political pundits or their sponsors
- Chain emails
- A guy who got a past market call right
- Anything said from a permabull or permabear
- Golf course investing tips
- Any inside information
- A guy who has a TV show
- Anything from an investment company
- Returns that are much higher than the market
- Anything you can’t really understand
- They are pushing politics or their revenue stream, not investments
- Usually crazy rumors with little basis in reality
- Yes, could give the guy credibility OR every blind squirrel finds a nut
- If they are always bullish or always bearish they have a predisposed view of the market
- Typically people only talk about their winners
- Aside from being illegal probably isn’t inside anyway
- He or she is gunning for ratings, not necessarily investment advice
- They are pushing a product (caveat: they could have some pretty good research)
- All good things come to an end or it’s a total fabrication
- More confusing = more costly AND/OR less idea of how it will perform
Of course, this list is not all encompassing. Just what popped into my head.
Justified is the
key word. Any of the above may
ultimately have the right call on the market or an investment; however, I would
bet using any of the above as the ONLY reason to invest in something will often
end in disappointment.
Point being, do your own research to formulate your own
thesis or find some research with an actual thesis before making a decision
either way and if you see fit use one of the items from the list above to
compliment that thesis.
Please see the important disclosures that apply to this commentary HERE.
