|
Raise your IQ, invest in stocks
01-06-2012, 09:36 AM
|
#1
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
|
Raise your IQ, invest in stocks
My title is a bit tongue-in-cheek.
Here is the article from Larry Swedroe,
A sign of a higher IQ is investing in stocks - CBS News
Quote:
High-IQ investors are more likely to effectively diversify, holding mutual funds and larger numbers of stocks. Thus, they experience lower risk and earn higher Sharpe ratios, which measures risk-adjusted performance.
High-IQ investors are also more likely to hold low-beta stocks and have more exposure to small-cap and value stocks, resulting in higher Sharpe ratios.
|
Comments welcome.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
01-06-2012, 10:05 AM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,934
|
I'm with Warren. IQ is helpful but only to a point. Beyond that point, you begin to think you can pick stocks and call markets. I think humility and a strong stomach are much more important.
__________________
And if I claim to be a wise man, it surely means that I don't know.
|
|
|
01-06-2012, 10:15 AM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
|
From the article,
Quote:
Sure enough, it seems the smarter you are, the more likely you are to invest in stocks.
|
To me, this is a no-brainer. Assuming
* a high IQ predicts high likelihood of success in college, and
* a college degree results in higher income.
Then, those with high IQ's have higher income than others, on average. So, it seems logical that they would have more excess income to invest.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
|
|
|
01-06-2012, 11:40 AM
|
#4
|
Recycles dryer sheets
Join Date: Aug 2011
Location: aberdeen
Posts: 267
|
Let me disagree a little bit.
A high IQ may lead to high education and better job. There are also folks with high IQ but poor attitude and drive and did not go far.
Investment in the stock market does not reflect high IQ, although perhaps most people with high IQ are successful, have more discretionary income to be in the market.
When I was younger, I joined an informal Stock market club composed of older men. I was the youngest and inexperienced of the bunch, but I was probably the most educated. After a while, despite, being the neophyte of the group, these seasoned men believe in my recommendation and stock picks. I myself is fooled that by studying each stocks and trends, I'm beginning to be good at it-- that is until the market crashed!!!
I found out that most of the info. out are obsolete by the time the reg. man reacts to it, and I was just riding the wave of good luck, and investing when the trend is going up. It's all a crap shoot. Or a dart shoot.
Your IQ can only get you to a certain extent, market cycle can be inefficient and complex, nobody knows what will come next/
|
|
|
01-06-2012, 01:02 PM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
|
Here is the 2nd article about high IQ's and investing:
Being smarter means a better investing experience - CBS News
Quote:
High-IQ investors' stock picks and execution skills result in a 2.2 percent per year spread between the portfolio returns of high- and low-IQ investors. This 2.2 percent spread ignores differences in market timing arising from moving cash into and out of the market. The spread jumps to 4.9 percent per year when IQ-related differences in market timing are accounted for, including the tendency of high-IQ investors to avoid market participation when returns to stock investing appear to be low.
|
These studies are about groups of people. So it doesn't necessarily apply to an individual except in a probabilistic way.
Of course, if you recognize you are not all that brilliant, you can go the index route. Or you can go the low-ER balanced route (Wellesley, Wellington).
I'm sure each person reading this thread is a high-IQ (or honorary high-IQ) investor. Just reading this stuff makes you smarter. Especially if you agree with my comments.
|
|
|
01-06-2012, 03:17 PM
|
#6
|
Recycles dryer sheets
Join Date: Jul 2010
Posts: 127
|
Investing in individual stocks can give you high blood pressure.I don"t know what my I.Q. is,but I feel a lot wiser since I"ve become a passive investor.
|
|
|
01-06-2012, 03:24 PM
|
#7
|
Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,714
|
Is it the higher IQ that leads people to invest their money, or do people with higher IQ's think they can produce above average investment results because of their IQ's? I worked with lots of very smart people who were always after the latest hot stock tip and shied away from passive mutual funds.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|