The Myth Of The Expert – Trust Yourself instead of listening to gurus

Joel Greenblatt has rightly said that most academics and professionals won’t be able to help you beat the market, which leaves you with just one option i.e., yourself.

It isn’t easy to live as an investor. Negative news can take you as a surprise and the media can exacerbate the perception of the risk level. Also, there is no way for anyone to predict what the market would look like in the future.

For instance, in the autumn of 2016, immediately before the U.S. elections, several articles were circulating in the media that predicted a decline in shares if Trump became the president. Surprisingly, Trump was elected and the stock market rose exponentially over the next two years.

We see financial experts commenting on interest rates, shares, currency, house prices, etc. but what would financial news be without countless interviews with these experts? Journalists have to come up with new stories even though there is little to nothing to write about.

An expert can’t say that they don’t know what would happen to the market when asked for their opinion or analysis.

Stock prices are influenced by a myriad of factors and it’s impossible to keep a tab on all of those. Every time the market experiences a larger fall than normal, the discussion around whether this could be the start of a larger decline or an opportunity to buy arises.

However, it is impossible to predict a future that doesn’t exist. Therefore, beware of all those predictions.

Moreover, the person who is speaking may have a hidden agenda. Analysts compete amongst themselves for your money to earn on brokerage and management fees. You must filter out the noise, be selective with what you read, and look for theories that confirm your assumptions.

Therefore, you must trust yourself and back your instincts based on facts and the real situation that’s playing out on the ground instead of allowing financial experts to influence your judgment.