Why did we lose our trust in banks and management companies
We made one of the best executive decisions when we refused to use management companies and banks to manage our assets.
The recent decades information has become more transparent and accessible. Anyone can get necessary knowledge in the internet and use it successfully in the investment business, which means that the line between investor and investment manager is gradually blurring. To illustrate that we can provide some uncomforting numbers: more that 70% of the management companies lose to markets annually, hence putting their clients’ funds at risk. The worst manager differs from the best manager only by 1%. Stock market has shown that most managers lose to indexes in the long run. For that reason, index funds with minimum internal commissions have gained popularity. Classic investment consulting and management does not recoup the costs of existing commissions, which encourages bankers to sell their own high-margin products (notes and bonds).
Turns out that in the world of accessible information and equal opportunities, chances for success between a novice and a broker are conditionally equal. That is why a growing number of investors is refusing the classical way of management.
In the world of commerce, there are trading rules, according to which any self-respecting broker will create investment products specifically for you and will make every effort to receive increased commissions from your transactions. But, unfortunately, with this approach, it’s the investor who suffers, he has to think about the risks and security of his investments, and rules of diversification.
In our own practice we had an investor who learned from his own experience. ‘These amazing shares that keep growing for two weeks in a row are owned by my wife too. She has not been trading them. But I kept trading them. Two years later my wife seems to be a better investor than me’, he told us. This confession demonstrates the truth of life of every investor. All you need to do is make a right investment choice, purchase it and keep it.
Some shares may not grow for years. For example, Russian index RTC has been in the 2000-1200 range for nine years, and American S&P has grown in that timeframe, which means that when buying shares, one has to know markets to be able to make the right choice. It is much easier with the bonds. You just need to choose the bonds that will pay off. We are ready to give advice, share our opinions about a particular security, so that you can build your portfolio and invest your money wisely. That's why we created the Wattabuy app. Install it on your smartphone, purchase highly rated securities and store them.