Every year the stock pickers put together their top “picks “for the year and well, we like to see how they went…. Given they tend to not publish their results …
Despite decades and decades of data showing just how hard stock picking is, every year people will read these articles and jump on board.
Whether you look at the results every year, the statistics, evidence from decades of data and research, or just think about it logically – it’s not a sensible way to invest.
So without going into the stats the evidence or the logic let’s just check out the result from last last year from one of the most well-known stock picking groups.
So, One of the most well known in Australia published these stock picks in January, and here is how they went as at 22 Dec.
|Stock||Code||Price 2 Jan||Price 22 Dec||Return|
|Treasury Wine Estates||TWE||16.19||9.16||-43.42%|
The red are negative, so yes only three picks were winners.
If you invested $1000 in each stock your $10,000 would be worth $8461
And this is from one of the most well-known and publicised stock guru sites!
Now this is only one site and by simple arithmetic the good news if these guys did so bad, someone else won. There is a winner and loser to every trade. I hope you were the winner.
But in reality this is just not a sensible way to invest your hard earned money.
Market evidence shows that over time the winner and loser for each trade this zeros out .
This is illustrated on a site like standard and poor’s thttps://www.spindices.com/spiva/#/
This site shows the percentage of fund managers that beat their indexes over long periods. Check it out!
So what is the lesson here?
When this year’s Top ten picks are published, be careful about following them
If you want to invest successfully over time you don’t need hot tips!
You can lean on science rather than guesswork!
2021 – Make smart decisions with your money.
At Arch Capital we are passionate about making sure the client comes first.
The good news is there is a better and far smarter way to invest. It’s using the research from academia, what we call the academic advantage.
To take control of your finances and learn more about how to invest successfully with an academic advantage – check out www.Arch Capital.com.au for more readings and insights on how markets really work and how, as an investor you can learn how to really invest and not gamble.
It’s your future.
Here’s to smart investing using science not guesswork.
Founder – Arch Capital