We often hear this saying: The buyer is not as smart as the seller. Chinese consumers are usually quite savvy, but in the face of the powerful propaganda offensive of Wall Street, we often believe the fake as the real. The article I introduce to you today is from Mark Cuban, the owner of the NBA Dallas Mavericks. I hope it will be inspiring to you.
The biggest lie Wall Street has ever told ordinary people is “buy and hold.” They always say this, but they don’t do it. The average holding period of investors has dropped from 8 years in the 1960s to 2 years in the 1990s, to 8 months in the 2000s, and today they buy and sell in milliseconds. That’s why it’s rare to hear the advice of “buy and hold” nowadays. Individual investors have finally understood this old saying: Fool me once, shame on you; fool me for 50 years, shame on me.
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But Wall Street always needs a marketing slogan, right? How else can you attract money to the stock market? So what new claims do these brokerages, mutual funds and ETFs have to get you hooked?
Asset allocation (diversification) is the best investment method.
Everybody talks about diversification. This is no surprise with all the mutual funds, real estate investment trusts, and exchange-traded funds that keep popping up, because the more investors can be convinced to diversify, the more money there is to buy these funds. Wall Street has to keep the sales machine running, which is good business for them, but not for you.
Wall Street doesn’t want you to know what you’re buying. Do you remember what Peter Lynch said, that stock investors should pay attention to places like the market and use them as a source of thinking and information? Or what Buffett suggested, that we should invest in things we know and find value in them?
Today, your investment advisor wants you to buy things you don’t understand and have little ability to understand. They want you to diversify into emerging markets, commodities, international bonds, municipal bonds, real estate investment trusts, and other products.
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