Facts About Equity Research
It is a fact that most people do not even know what equity research is. Equity research is what most fund managers do to try and beat the market. Over 80% of the fund managers fail to beat the market and so it is surprising that some rare individuals can do so well when everyone else is failing.
Q. Where do you go to get good equity research?
Most prestigious firms have equity researchers, but they are only portioned out to wealthy accounts. Typically the amount is over $500,000.00 and sometimes may be as low as $50,000.00. It is important to have an equity researcher on your side.
Q. What is the difference between an analyst and an equity researcher?
Market analysts are typically paid by the stock or fund company to provide a good recommendation. In other words, most analyst ratings are junk. An equity researcher, on the other hand, will usually work for a prestigious firm and give out stock picks to their favorite customers. Truly, the wealthy are making money of the average joe worker.
Q. Why can't Harvard MBAs beat the market?
With a large mutual fund, it is mathematically a near improbability. Great returns are almost always garnered upon investments below one million dollars. The other reason is that tempermant is more important than intelligence. Fund managers get huge pressure to pull the trigger on stocks and it takes a special temperament to stand up to the pressure.
Q. Why Can an Average Person Beat the Market?
Most people that do their own homework can beat the market because there are many market mispricings that someone with less than a million can take advantage of. The problem is that the people that have the advantage do not have the knowledge. Those that have the knowledge are managing too much money to follow it. The market conditions heavily favor a small investor that is astute and studies up well.
Q. How Much Money Do I Need for Retirement?
Retirement funds are based on what you currently make and what lifestyle you will be living at retirement. In general, if you put away 10% into savings and own your home about 90% of people will be ok. If you can't save that much, you should try to.
Q. Should I Mix Insurance With Investing?
Insurance should be treated differently. Any investment product I have ever seen bundled with insurance was a total rip off.
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