Another problem I have with the financial media pundits: The persistence of the use of contests to see who can pick stock winners over a certain period of time.
There is no expertise required for this, just sheer luck because of several reasons:
One: Picking securities to measure performance over an arbitrary period, without having to designate how long you would hold your securities, does not indicate predictive power, as the contest is supposed to prove.
Two: The contest never gives you true ground rules, one of which is always risk. In a contest the assumption is that you throw caution to the winds and pick the riskiest for the maximum returns. This is not a real investment environment.
And three: Gurus usually sell you an expensive management service. Advisers who take 1½% of your assets a year when you earn 6%, at best over the years, are enormously expensive, They have thus taken 25% of your income. Every year.
I have often mentioned my study of the cons as well as pros of over 1500 strategies used by investors. My work is unique because it never recommends any particular strategy, unlike other recommendations you get. The truth is, each has its good and bad points,
Strategies must be tailored to individual preferences and needs. What tips the odds for each investor is the discipline employed in the use of strategy. Every investor has built into the purpose for the purchase of a security, the reason to sell it. Discipline guides that sale.
That is what tips the odds favorably. ( See the Earl J Weinreb NewsHole® comments.)
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