I don’t know how many people read financial articles, sometimes it’s a pain to find a good one, but one of the more interesting once I have found is called “Don’t try to invest like the pros.”
The writer of this article analyzed 600 finance professors at major U.S. universities to find out how they invest their money. We all had professors who preached market efficiency theories as well as risk and reward analysis. What the author has found is that most professors do minimal stock picking and avoid alternative investments. Seventy five percent of professors hold low cost index funds that account for a major portion of their investments. Essentially they diversify and do not believe that they can beat the market.
To me that is amazing and in most cases contradicts what we learned in our finance classes.
Read the rest of the article and let me know you guys think.
http://money.cnn.com/2008/01/28/pf/dont_expert.moneymag/index.htm?postversion=2008020311
February 4th, 2008 at 4:21 pm
That is a great article.
“…having spent their careers studying the stock market, these experts have concluded that it can’t be beaten by anyone – except them”
That was very funny. The last part of the article The real lessons has some good tips. Thanks for this one.