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Why geezers give the best investment advice
Old 10-05-2011, 08:35 AM   #1
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Why geezers give the best investment advice

This guy had obviously had a deadline to meet Interesting perspective on how to choose a financial adviser:
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...the next time you talk with a financial adviser or broker, instead of inquiring about investment performance, you might want to ask, “How old are you?”
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It’s true that the ability to analyze, process and retain new information—what scientists call “fluid intelligence” — peaks around age 20. But another type of smarts, “crystallized intelligence”— otherwise known as experience and knowledge — actually builds with age. Right around our early 50s, these two divergent trajectories intersect.

Just look at the 20-something day traders and mutual-fund managers during the late 1990s dot-com boom who argued that “this time it’s different.” Meanwhile, famed value-stock investor Warren Buffett, then pushing 70, was dismissed as hopelessly out of touch for not buying the technology hype. Where are those Internet-stock fund managers now and, moreover, their high-octane funds? Not in Buffett’s league, for sure.
Why geezers give the best investment advice
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Old 10-05-2011, 08:51 AM   #2
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Based on the evidence found in the research, anyone between 43 and 63 “is really in their cognitive sweet spot,” said David Laibson, a Harvard University professor and, at 45, the oldest of the study’s four authors.
I dunno. At 63, I sort of think a 45-year-old might not be the best one to determine that window...

Seriously, I do think that the type of intelligence we have evolves with time. For example the ability to see the big picture is something that seems to improve as we age.
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Old 10-05-2011, 09:19 AM   #3
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Of course, if the advisor is in his mid to late 60s, your next question might be "if you're so good, why are you still working?" Assuming you would get an honest answer, if it wasn't "because I love what I'm doing" you might want to look elsewhere. No matter how chrystallized their intelligence might be.
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Old 10-05-2011, 09:26 AM   #4
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Why would you want a finacial advisor? If I had to have one, I'd want to her to be a hot 20 something that was usually scantily clad. Even then, I certainly wouldn't listen to her advice on what to do with my money.
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Old 10-05-2011, 09:52 AM   #5
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Of course, if the advisor is in his mid to late 60s, your next question might be "if you're so good, why are you still working?" Assuming you would get an honest answer, if it wasn't "because I love what I'm doing" you might want to look elsewhere. No matter how chrystallized their intelligence might be.
Old Dutch saying: "We grow too soon old and too late smart."

It took me a fair amount of time to get smart about personal finance. My folks were a good model, but did not actually teach us what they had learned. Pop worked for the government and admitted that what he knew wouldn't be much help to us vis-a-vis retirement. (He underestimated himself.) I was led down the false path for a long time by financial porn. I made mistakes. Fortunately, I wised up--not early enough to be financially independent by now, but not too late to avoid disaster.

By now, I can be a good financial advisor to my kids. Of course, they won't listen, but at some future time they may remember enough to save themselves.

As it happens, I do enjoy what I am doing (engineering, not FP), but I have no aspirations to become anyone else's financial planner or teach in the community colleges or work for Edward Jones or anything like that.
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Old 10-05-2011, 10:05 AM   #6
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"these two divergent trajectories intersect."

This is such a thoughtless phrase. I know he's trying to say that in the 50s, you're not yet senile and you've gained experience, but there is no intersection of lines because the variables are different. Even if there were, there's no reason to think that the intersection represents some optimal point.

Sorry, I just don't like phrases that have meaning only if you already know what the writer wants to convey.

Logic police out.
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Old 10-05-2011, 10:15 AM   #7
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Even Warren Buffet was young once.

This thread would get a lot of hits if you had just called it "Why geezers give the best....", REW.
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Old 10-05-2011, 10:18 AM   #8
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This thread would get a lot of hits if you had just called it "Why geezers give the best....", REW.
Please change the thread title for me...
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Old 10-05-2011, 12:09 PM   #9
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I dunno. At 63, I sort of think a 45-year-old might not be the best one to determine that window...

Seriously, I do think that the type of intelligence we have evolves with time. For example the ability to see the big picture is something that seems to improve as we age.
There's a saying in spanish
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Más sabe el diablo por viejo que por diablo
very roughly translated,
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the devil knows more just because he's old, not because he's the devil
There's a lot to be said for grey hair, piloting jets and managing portfolios.
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Old 10-05-2011, 01:19 PM   #10
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Old Dutch saying: "We grow too soon old and too late smart."
Or this one attributed to Mark Twain:

"Life should begin with age and its privileges and accumulations, and end with youth and it's capacity to splendidly enjoy such advantages."
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Old 10-05-2011, 01:29 PM   #11
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It's hard to beat Abe Simpson:

I leave these: a box of mint-condition 1918 liberty-head silver dollars. You see, back in those days, rich men would ride around in Zeppelins, dropping coins on people, and one day I seen J. D. Rockefeller flying by. So I run out of the house with a big washtub and--Where are you going?

Ah, there's an interesting story behind this nickel. In 1957, I remember it was, I got up in the morning and made myself a piece of toast. I set the toaster to three - medium brown.


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Old 10-05-2011, 02:46 PM   #12
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From the article..."Based on the evidence found in the research, anyone between 43 and 63 “is really in their cognitive sweet spot,” said David Laibson, a Harvard University professor and, at 45, the oldest of the study’s four authors."

Hmmm...I just turned 53.

Does that entitle me to sit at the sweet spot of the author's Sweet Spot?

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Old 10-05-2011, 02:49 PM   #13
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My father's advice was the best:

Never give your money to an investor who still has to work for a living. If he's so smart, why ain't he rich?
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Old 10-05-2011, 03:12 PM   #14
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Old 10-05-2011, 04:09 PM   #15
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My father's advice was the best:

Never give your money to an investor who still has to work for a living. If he's so smart, why ain't he rich?
I felt the same way about "guidance" counselors in high school.
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Old 10-05-2011, 04:25 PM   #16
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I felt the same way about "guidance" counselors in high school.
Lol!

Or priests giving "marriage preparation" classes.
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Old 10-05-2011, 05:42 PM   #17
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Why would you want a finacial advisor? If I had to have one, I'd want to her to be a hot 20 something that was usually scantily clad. Even then, I certainly wouldn't listen to her advice on what to do with my money.
If I had a financial advisor like that then I'd probably do anything with my money that she wanted me to. I'd even throw in my spouse's money too.

What were we talking about again?
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Old 10-05-2011, 05:52 PM   #18
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If I had a financial advisor like that then I'd probably do anything with my money that she wanted me to. I'd even throw in my spouse's money too.

What were we talking about again?
The spread?
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Old 10-05-2011, 05:58 PM   #19
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If I had a financial advisor like that then I'd probably do anything with my money that she wanted me to. I'd even throw in my spouse's money too.
You'd probably be inclined to short Pfizer, realizing that one of their cash cows was unnecessary....

(Sorry. Couldn't resist. )
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Old 10-05-2011, 10:46 PM   #20
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From the article..."Based on the evidence found in the research, anyone between 43 and 63 “is really in their cognitive sweet spot,” said David Laibson, a Harvard University professor and, at 45, the oldest of the study’s four authors."
Well, poo. Off the cognitive map. Guess I will have to sit in my corner and count my pennies.
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