You are completely responsible for your financial and investment success or failure. Delegating investment decisions to industry advisers largely on naive faith and hope without adequate personal knowledge, attention, and control can be very risky to your personal and family welfare. The only practical solution is for you to increase your personal investment knowledge and skills.
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Individuals must decide for themselves whether a particular financial or investment concept is fact or fiction, personally useful or not.
Individual investors face formidable challenges to their ultimate success. Many investors have very inadequate financial planning and investing knowledge and skills, which makes self-direction problematic. Unfortunately, much information from the industry is shallow and inappropriate. This information may seem plausible, because the financial services industry writes it to sound reasonable to individuals. Some of it is reasonable and some is not.
The actions that people take based upon such information may not lead to the best financial decisions and results. Instead, the information provided is designed to further the interests of the industry, which sells financial products and services to individuals.
For example, when many hundreds of highly diversified mutual funds and ETFs are available at extremely low costs, there is no good reason for individuals to do so much buying and selling of individual securities.
Yet, millions frantically buy and sell equity securities in hopeful efforts to beat the market. They are egged on by the financial media and the brokerage industry, and most waste huge amounts of valuable personal time in these pursuits. Most will fail miserably in their efforts and suffer substantially increased risks, costs, and taxes in the process. Yet the vast majority will never bother to check their net performance against passive benchmarks and will never really know how badly they have done. (See: What is the cost to individual investors of sub-optimal portfolio diversification?)
Individuals can do a better job of distinguishing financial planning and investing fact from fiction. They can choose to base decisions on financial strategies and tactics that have been validated scientifically. Individuals must become better informed. Otherwise, naively, they must rely upon the supposed goodwill of others. In the very costly environment of personal finance and investing, depending upon the goodwill of others can be a very risky strategy.
Significant danger exists in not understanding [...]