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Around the Internet => Mustachianism Around the Web => Topic started by: Rust on July 03, 2013, 09:55:48 AM

Title: Your Last Remaining Edge on Wall Street
Post by: Rust on July 03, 2013, 09:55:48 AM

I'm not typically a fan of Motley Fool Articles, but Morgan Housel wrote a nice one which I recommend retail investors read. 

The reason why is he does a good job of showing how with a long term horizon on trades, retail investors have an edge over Wall Street which has to impress today.

He shows that in under a year any investment is basically a coin flip.  For this community I realize this isn't earth shaking news, but nonetheless there are folks at various levels of their journey.

http://www.fool.com/investing/general/2013/06/18/your-last-remaining-edge-on-wall-street.aspx

Title: Re: Your Last Remaining Edge on Wall Street
Post by: arebelspy on July 04, 2013, 11:07:38 PM

Very good article for beginners, and to remind the rest of us to focus on the long term, rather than short term results.

Even for someone working towards FIRE, who may retire in a year, your portfolio needs to last 30, 40, 50 years or more.  Think long term.

I particularly liked this graph:
(http://g.foolcdn.com/editorial/images/50947/market-returns_larger_0613_large.jpg)

Thanks for sharing!

Title: Re: Your Last Remaining Edge on Wall Street
Post by: velocistar237 on July 05, 2013, 04:55:23 AM

Anyone know how much money the financial industry makes off of actual market gains and how that compares to how much they make off of fees?

Title: Re: Your Last Remaining Edge on Wall Street
Post by: pom on July 05, 2013, 05:48:33 AM

Hi Velocistar,

Financial industry is too wide, what part are you talking about, brokerage, hedge funds, private equity, money managers, retail banking, corporate banking, insurers?

If you are talking about money managers, the bulk of the money is in fees. Market gain doesn't usually bring much directly but obviously it increases the pot and may brings fresh money both of which bring more fees.

For hedge funds and private equity, the reverse is usually true.

Great article, that has been my feeling all along.

Title: Re: Your Last Remaining Edge on Wall Street
Post by: velocistar237 on July 05, 2013, 06:44:30 AM

I wasn't sure how to frame the question, the extent of my knowledge of the financial industry being just what I learn through Planet Money's RSS feed. I guess money managers is what I cared about most. Thanks.