Image Credit: Alex Nabaum
By Jason ZweigÂ |Â April 19, 2019 12:00 p.m. ET
Bit by bit, the myth of the âdumb moneyâ is dying.
For decades, Wall Street has derided individual investors as ill-informed, fickle and hapless. Instead of buying and holding, or buying low and selling high, the âdumb moneyâ blindly chases performance, buying high and selling low. The perennial message from Wall Street: The only way the dumb money can get smart is by taking our adviceâat a reasonable fee, of course.
That wasÂ always nonsense, but new evidence of its foolishness is piling up fast.Â A studyÂ of clients of Vanguard Group, the giant asset manager, is the latest look at how individual investors make decisions. It shows them, overall, to be patient and prudent. It also offers a hint as to how investors and their financial advisers can get a little smarter still.…
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For further reading:
Benjamin Graham, The Intelligent Investor
Jason Zweig,Â The Devilâs Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
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