Wednesday, February 20, 2013

Smarter Investing by watching the Pro's ...

“The greatest education in the world is watching the masters at work.” - Michael Jackson

Let’s face it … the quickest way to become great at something is by learning from the best and if you want to be a ‘Professional’, you need to do what the Pro’s do.  In investing that means learning from the Institutional Investors. 
Pension Funds and Hedge Fund of Funds consistently outperform the market year after year, while our own ‘local’ financial advisors and brokers consistently do the opposite. 

I’ve often wondered why is that?  Why do the “big boys” who handle billions of dollars outperform while the local Merrill Lynch, LPL Financial, Transamerica advisors consistently perform worse than if you were to just take a buy and hold approach?

In my line of work I'm fortunate to work with both types of investor.  I literally take part in hundreds of calls a month with potential clients from all walks, and am continuously amazed at how different these two types of investors approach an opportunity.

It’s obvious … retail investors, we have a lot to learn from the big boys …

Generally the difference I see is in the due diligence and investigative process that the two groups partake in. 

Remember, the goal here is to make good investment decisions that will grow your net worth during healthy markets and protect it during uncertain times … to refine your decision making process so that you do not end up like most retail investors that end up making little to nothing while their Investment Advisor/Financial Planner/Broker gets paid for making bad decisions that ultimately cost you future profits.

In my next post, I will share a few examples, which show the stark difference between the Retail investor and Institutional.  Hopefully through this, it will help you improve your own due diligence process.
click here to read part 2 of this post

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