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Well I've said all week you know way more about the market's going to give yourself credit for consumers in the marketplace have firsthand knowledge.
A -- companies have gone it's not the pros packing away -- office cubicles -- the ivory towers.
Here's some real world advice for you the pros are probably encouraging you to make one of the worst mistakes with your money.
Tonight I've got my pet peeves and investing in what you need to know about here to help break it down -- is a Jack -- editor of Barron's dot com and also offer up.
Worth it not worth that simple a profitable answers to watch golf.
Financial questions Jack welcome to the show thanks very much -- I gotta tell you.
There's so many different things at that bother me what the market just just from people saying that they play it.
To the idea of a cheap stock is cheap because it's one dollar share.
To tell how much people put in the stock hit in other words up by a hundred shares -- everything that's you know.
That there's just so many common basic mistakes that they make but really one of the biggest ones I think that's when it comes to the idea that that the person fine.
Sure I you're you're not talked about how people think they're diversified because they -- sixteen mutual funds gosh I gotta be diversified but in fact they're all large cap growth funds.
-- in the S&P does down they get hammered.
And they've been sold these funds by brokers who probably put it last year's performance and they did really well.
So they bought them in the broker made a commission on it.
But in fact your in my book -- write with -- what I called a no brainer portfolio.
You can don't just three or four funds and you can literally have access to all the stock markets of the world and most of the bond markets -- -- you truly are diversified and so we know we know one -- she'll do well wonders you badly you on at all.
So what's the deal and I mean these brokers listen I was a -- in that really my marching orders -- to get.
Money under under management and you know just that was it.
It didn't really matter at this somewhat on the stock and what have you called -- mr.
Jones's stock is up send more money -- -- -- -- that really essentially what it's all about.
Well I -- -- -- we're not trying to -- the entire industry but you know again you've got a family upon they've got forty bonds and and they're not that much different.
Well exactly I don't -- too broad -- brush here but absolutely there in the business of asset gathering.
And so if you really want truly objective advice you go to a fee only advisor who doesn't make commission on the fun because one of the very few things that an individual investor can actually control.
His his costs and so -- -- and -- morningstar's gonna study and they found that.
-- only correlation in terms of fund performance -- and if past performance.
But if you break them down by cost the cheapest funds do the best and most expensive do the worst and it's great because if you buy because you gotta pay more to get a nicer car right here with -- -- the opposite -- get a better -- -- talked about what people can't control I think what they can't control behavior right and right.
We are hard wired to make mistakes.
Yeah I mean there's this whole area of behavioral finance that I find fascinating.
And -- a couple of key points one is lost -- version.
We -- -- think about this we feel the pain of a loss much more strongly than the joy of the game.
So what people do as a result that they don't sell those stocks that go down because they did they don't -- knowledge it's a loser -- that don't sell that I might get back leave it but they do sell the winners.
So first all that's terrible tax planning -- paying tax on the gains you make -- -- not getting the deduction for the losses.
And also frankly probably should be riding that -- -- longer and dumping the -- putting them.
I know what I mean that's something -- that's it and to be fair it's hard it's hard to grapple very hard.
It's also we called pride and ego in the industry right in my pride is hurt my Eagles heard I had a loser I thought it was a winner.
Before -- you go we can talk about biases I mean I just had an interview right before you.
And and that person has embedded biases against the market against a political party -- -- certain system.
They did it did and there's so many biases that to stop us from optimizing this amazing system called the stock -- yet to to keep.
It's that one you've got to rethink your biases I mean I love my iPhone to does that mean apples and by 700 no.
You know -- -- that I don't like Obama so I get out the stock market on nine he missed the greatest -- -- -- rally in history.
-- that's number one and number two is if you're really worried about all these things insiders -- that prices.
Go with index funds own the whole market.
If somebody's insider trading who cares you on the stock market and we had a great you know last night from guys -- suggested just that I'm glad you brought up that you're fantastic for a great to be present -- season.
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