Don’t Be Another Wall Street Chump

OASIS FORUM Post by the Golden Rule. GoldTent Oasis is not responsible for content or accuracy of posts. DYODD.

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Don’t Be Another Wall Street Chump

Posted by Richard640 @ 17:55 on September 14, 2019

Authored by Economic Prism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,

The Future and the Past

Securities and Exchange Commission Rule 156 requires financial institutions to advise investors to not be idiots. Hence, the disclosure pages of nearly every financial instrument in the U.S. are embedded with the following admission or variant thereof:

“Past Performance Is Not Indicative of Future Results”

“Buy and hold”… “The market goes always up”… “No-one can time the market”… “Buy the dip” “With what? You said not to sell anything”… “Simple, mortgage the farm…” The image above shows roughly what happens right after everybody feels the warm & fuzzies due to the fact that the market has been going up without a hitch for quite some time. Once the conviction that it can only rise further is widespread and firmly embedded in investor psyches (who cares about valuations?), this is often what the next scene looks like… [PT]

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The instruction is futile. Most investors are idiots, including many of the pros. What’s more, suspiciously absent from all disclosures is “how” to not be an idiot. Perhaps this is because such guidance would discourage many unwitting investors from getting mixed up with the stock market in the first place.

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Without question, if you don’t know what you are looking at, the past can be an abysmal predictor of future investment returns. One year the S&P 500 is up 10 percent. Another year it is up 20 percent. Then, to the surprise of practically every Wall Street analyst, the S&P 500 crashes 50 percent.

OASIS FORUM Post by the Golden Rule. GoldTent Oasis is not responsible for content or accuracy of posts. DYODD.

Don’t Be Another Wall Street Chump

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