You work in finance so where should I put my money?
Surely finance professionals should know where to invest money?
At the weekend I was out for lunch at my cousins. My aunt had a friend there what heard that I worked in finance. The friend became very animated and asked me: "you work in finance, so where do you think I should invest my money?".
The question caught me by surprise. I wasn't expecting that simply because I work with numbers I should thus be qualified to give financial advice. She explained that she thought I may be hearing about investment ideas not otherwise available to the general investing public. Sadly she was misinformed. Hints and tips on personal investments discussed amongst financial professionals are generally no more reliable than those of any other ordinary citizen. I explained to the lady that she shouldn't rely on tips and advice from other people. I was no more qualified to tell her where to put her money than anyone else was. I explained that if she was looking to invest in the long term then she should look to invest in property or equities - however the specifics of which must be assessed by the individual on a case by case basis depending on their attitude to risk.
Other investment considerations
There are so many variables when it comes to Investing over and above whether the asset is likely to grow in value. For example, it matters what your tolerance to risk is. It matters what time horizon you're looking to invest over. It matters what other assets you're invested in and how diverse your portfolio is. It matters how much you've got ready to invest. All of these investment variables can only be answered by the individual and cannot be answered by even the greatest investor.
Should I invest in gold?
The lady then went on to ask several times whether I had heard anything about gold potentially going up? She had heard from a renowned investor that it was a good time to invest in gold.
I asked her how she thought he knew that gold prices were going up? How could he have insight into the trades of global gold investors? If he had that sort of knowledge he'd be the richest man alive. No one is able to have that level of insight into a market. It just isn't physically possible. We must therefore assume that the person offering the advice so freely must either have a hunch only (albeit maybe an educated one) or else they have a vested interest in gold prices going up and hence need as many people as possible to be buying gold.
The lesson here is that there is no such thing as a guaranteed deal, or a get rich quick scheme earned through a tip. It's a fruitless task going around and asking others where to put your money. Only you can determine where to put your money based on your own personal circumstances outlined above. Furthermore, we must all be careful about offering finance advice in order to prevent accidentally adversely affecting the finances of another. I write this blog to discuss personal ideas. Do not mistake it for actual fiancial advice. Take care and invest wisely!
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