Successful investing depends on knowing what you’re doing when you put your money into an asset, instead of stumbling around in the dark or treating the financial markets like a casino. If you have basic knowledge of how the markets works, how it’s measured and valued, and what moves stock prices up and down in both the short term and long term, then you’re already way ahead of most other investors.
This is not made up and it is mid-boggling to know how little the private investor knows about where he puts his hard earned money.
In December 2019, the Financial Industry Regulatory Authority (FINRA), which regulates the New York Stock Exchange and the Nasdaq, surveyed U.S. investors using a simple quiz. It consisted of 10 straightforward questions that one should be able to answer before they start investing. The results were terrible. Only 1/3 of respondents were able to correctly answer six or more of the 10 questions.
These are very scary results. On average, investors got less than 50% right (4.7 out of 10 questions). You do not pass aby exam with less than 50% of the questions correct. That means, investor’s most basic knowledge is very low. FINRA politely called the survey results “potentially worrisome.” I would say such result is a disaster.
If you need help, coaching or mentoring, jut contact me.
Sven Franssen