Investing, specifically your own money, should be based on a deep and meticulous market analysis, especially for those that are risking a considerable amount.

Right now, it’s harder than ever to decide where to invest your money. The glooming global recession, fluctuating monetary policies, the war in Ukraine, and the global supply chain disruption are some factors that make it extremely hard to predict the movement of the market.

Unfortunately, in times of high uncertainty we usually seek the help of good intentioned “advisors” that want to show us the way to the double digits return and low risk investment opportunities. That’s the sort of advice that often misguides investors and leaves them with a blank stare at their broker account, wondering where all their money went.

I distinctly remember reading an article of Larry Ludwig called “All Personal Finance Experts Are Liars”, which is upsetting the applecart of many finance “gurus”.  Most of the finance advice they give, including investment advice, Larry Ludwig says: “to put it simply, it’s all bullshit”. I remember reading this article and remember how much it struck a chord.

“All Personal Finance Experts Are Liars?” I asked myself. “Surely this is clickbait?”

It is a practical rule of thumb to trying no asking others where to invest your money. No one has the magic crystal ball that shows the future, and no one is going to reveal where the money is at, especially when such information is worth millions of dollars. It’s important to mention that in this post I’m not talking about advisors from professional institutions and their services.

Investing On Your Own

The thesis is straight forward, and something that beginner investors should ponder.

In short, you shouldn’t ask others where to invest in right now because nobody knows, and if they do, they wouldn’t tell you since they could use the privileged information to make a lot of money themselves (there isn’t enough pie for everyone).

The solution? Instead of focusing on what other are saying, I suggest you make your own research from primary and secondary information sources and come up with your own analysis.

Researching and Analyzing the Market

“Without data you are just another person with an opinion”.

W. Edwards Deming

So many investment decisions are made on gut reactions. While some pay off, many end up in negative returns and debt too. If you make a quick on reddit r/wallstreetbets you will understand what I’m talking about.

The key is to research the market to gather data and come up with a discrete list of investment decisions and calculated risk.

If investors put the blood, sweat and tears into making a well researched and calculated investment decisions, rather than focusing on the bare minimum like readying a couple of news or listening to their favorite financial advisor’s podcast, their portfolios would perform exponentially better.

A good market analysis is something you learn how to do with time. I won’t be covering how to analyze the market because it is out of the scope of this post, but later I’ll be sharing some tips on how I perform my research and some of the best practices.

Takeaways

At the end of the day, if you really want your investments to pack a punch, you need to find the right information that maximizes the return on your investments decision and minimizes the risk. Your research effort will ultimately set yourself apart from the mass of mediocre investors.

You just learn why you shouldn’t ask others where to invest in right now, specially the “well intentioned finance gurus”. No one has the magic crystal ball that shows the future, and no one is going to reveal where the money is at, especially when such information is worth millions of dollars.

Remember this quote: “Without data you are just another person with an opinion”. So many investment decisions are made on gut reactions. Now is your time to become a professional investor and make your own informed decision.

If you want to learn more about market analysis and investment, you can send me a message using the contact form with your question or content suggestion.