Four things you will learn:
- Why picking stocks or trying to time the market is pointless
- Why fund managers have become ‘the market’ (and what that means)
- How behavioural biases lead us to make bad investment decisions
- Why index investing is the smart investor’s choice
The US election is the perfect demonstration of the futility of trying to beat the share market.
Those who tried to time their market entry were whipsawed in all directions, share markets initially fell 6% before staging an 8% recovery to close up for the week. Not only did most ‘experts’ call the election result wrong, they completely misjudged the impact that Trump would have on markets.
Meanwhile those with portfolios focused in popular yield-sensitive sectors of the market like property saw their investments crushed due to events in bond markets that were completely outside of their control.
None of this is unusual… time after time, finance commentators have their predictions proved wrong by the market. Those who try and beat the market by timing entry and exit points, or picking stocks or sectors, are outsmarted by each other.
So why is it so difficult for even the experts to get it right?
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