Answers to Frequently Asked Questions about VeriPlan and The Skilled InvestorMain »» Scientific Investing for Individual Investors:
|Table of Contents|
|Why does The Skilled Investor say that it offers "Sensible and Scientific Financial and Investment Planning?"|
|The Skilled Investor provides objective and useful information based upon the scientific investment literature. It summarizes selected insights from the published research of financial academics, economists, and investment professionals. The Skilled Investor serves the educational needs of individual investors who intend to base their investment decisions upon science rather than folklore and emotion.
Many individual investors lack convenient access to understandable information to help them develop deeper investment knowledge and to allow them to distinguish between investment fact and folklore. Because individual investors get so much contradictory and unreliable advice, they often operate on emotion and flawed instincts.
Individuals need solid evidence about best investment practices. The scientific finance literature demonstrates that a very large number of individual investors have highly suboptimal investment practices. Often the real financial consequences of individual investors’ actions have not been made plain to them.
It is one thing to repetitively hear and read high-level platitudes about diversification, asset allocation, minimizing fees, ignoring hot tips, and the like, but such exhortations may not be enough for some individuals to change ingrained habits. Therefore, The Skilled Investor provides information about the consequences of certain behaviors, so that a reader might say to himself – “oh, I do that … seems like it would be wise to make a change.”
In summary, The Skilled Investor educates individual investors on scientific investing, as they strive to manage and direct their own investment affairs.
For a more indepth discussion of individual investors' needs and The Skilled Investor's attempts to meet those needs, see:
What is The Skilled Investor and who will find it useful?
|What methods does The Skilled Investor use to develop its educational materials?|
|The Skilled Investor finds, analyzes, summarizes, and interprets relevant scientific investment papers and studies for the benefit of individual investors.
The Skilled Investor uses on-line subscription services, library research, and focused web searching to find scientific finance papers that are of potential interest to individual investors. ‘Publish or perish’ is alive and well in financial academia, and there are piles of investment studies to prove it. Hundreds of academic journals publish peer-reviewed papers on a wide range of investment topics. The websites of economic and financial faculty at academic institutions across the U.S. and around the world are awash with published works and with working papers that are available for use or comment.
The needs of individual investors govern which financial science papers The Skilled Investor selects. The Skilled Investor systematically compiles information on scientific factors that could have an impact upon investor’s success or failure. As such, The Skilled Investor collects investor surveys and tracks significant questions that individual investors tend to ask.
For more information on the specific methods employed by The Skilled Investor, see:
How does The Skilled Investor find and summarize scientific investment information?
The Skilled Investor has also set an important clarity goal. The author strives to simplify technical language without losing important knowledge. Only those few key equations that must be presented to convey meaning are presented in prose form.
Note that within the limits of his knowledge, judgment, and abilities, the author of The Skilled Investor tries to ensure that the information published is objective, factual, and accurate. Of course, the author can only make a reasonable effort and cannot warrant the accuracy or completeness of the material presented. In addition, The Skilled Investor seeks neither review nor approval by the authors of the scientific investment papers that are interpreted. As such, any mistakes, errors, or misinterpretations in summaries and commentaries are those of The Skilled Investor and not of the authors of the original papers.