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are you trying to start an investment advisory business? why do you think that you are competing against them?
No.
I'm thinking of investing my money in financial market. I can't really see how we amateurs can compete with professional traders from large investment banks.
why are you competing against them ? i use them . i have some pretty damn good fund managers in my corner for many many years . the likes of will dannoff from contra have produced excellent results for decades as an example .
we are also free to go where ever we like with no restrictions on assets ,size of companies we can buy , asset type restrictions etc . i have been averaging almost 11% a year for 30 years in plain ole fidelity funds . .
why are you competing against them ? i use them . i have some pretty damn good fund managers in my corner for many many years . the likes of will dannoff from contra have produced excellent results for decades as an example .
we are also free to go where ever we like with no restrictions on assets ,size of companies we can buy , asset type restrictions etc . i have been averaging almost 11% a year for 30 years in plain ole fidelity funds . .
well when i first bought it decades ago i gave it a shot because i liked the funds holdings and style . but good funds are not hard to find .follow the money . investor money tends to find them . i am not talking about the ones at the top one year and the bottom the next .
there are many in the middle that are there pretty consistently and over time beat their benchmarks .
don't forget they don't have to beat them every year . they just have to beat them when they do by a wider margin than when they miss .
I follow financials daily and started investing my own money late last year just before the election (great timing). I've outperformed the S&P YTD and enjoy the thrill of buying stocks. My fund is only $10k which I feel comfortable managing but I have plans to talk to an advisor this year about longer term investment strategies as I add money every month. I know that making the right investment decisions now will be vital 30 years from now when I look to use the money for a nice retirement home.
Bottom line, I would feel comfortable managing under 25k but once I clear that I'd sleep better taking advice from a professional.
I'm thinking of investing my money in financial market. I can't really see how we amateurs can compete with professional traders from large investment banks.
So, to start there are two completely different themes here. 1) You're talking about in the initial post investment pro's (analysts/managers/institutional) and 2) Traders. Both you can invest and if not beat, perform as good as in a general sense.
Let me start off by saying in general you will NEVER beat a finance pro, in analysis, trade structure or performance simply b/c it's what they do all day everyday and are disciplined enough to follow the plan. You can and probably will beat them in single trades, specific strategies and overall performance in the long-term b/c it's not what they do, and it's better really for what you want to accomplish.
1) They have spent MANY hours pouring over data, not just them but their entire team (12-50) people doing research writing consensus reports & strategies. You can't.
They have access to direct market information and pay for access to data (i.e. Bloomberg terminals).
2.) Traders they don't leverage their portfolio in a way that puts too much of the portfolio at risk at any one time. Pro traders (HF & floor) will NEVER put more than 3% of their available to trade in a position...EVER. They carry multiple positions, some 10-20 others 100-200. Obviously the smaller traders may put the 3 or maybe a bit more depending on the conviction strategy, but they're always hedged.
They have a defined trade plan, risk management strategy(exit strategy) and time horizon for each position, but most of all THEY STICK TO THEIR PLAN. No matter what happens, if the position hits the max profit % based on their plan/strategy they exit. If the position hits the floor price, they're out. No if's and's or but's. As far as traders go, that is the #1 reason they will ALWAYS outperform retail amateur investors.
This a general question that has bothered me for so long.
The investment bankers have superior resources that can beat us in practically every way. Is there any reason I should do investment on my own?
One only; your fees are lower, $4.95 a trade or less. If their fee was 1% then they'd have to beat the market by over 1% to break even with the average.
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