The cause of most airplane accidents boils down to two pilot related issues, insufficient knowledge and poor judgement. Although knowledge doesn’t always result in good judgement, the lack of it will usually lead to bad decisions. One of my favorite childhood cartoon shorts ended with the phrase, “Knowledge is power.” That phrase never left me and over the years I have learned that “power” means an increased likelihood of success, while minimizing risk. Thus, in everything that interested me growing up, I always wanted to gain all the knowledge I could.
In my youth I Iearned by reading books. It was a marvelous day when I got my first computer and was able to use the popular “AskJeeves” search engine to answer any question I could think of. I spent hours typing random questions and being thrilled with how quickly the answers came. It was a dream come true for me.
I thought the internet would solve many of the world’s problems with its ability to freely provide all available human knowledge to every living person. In time we all realized that the worldwide source for all knowledge was also the source for all lies and deceptions. It became clear it would still require good judgement to separate truth from error.
The other day Launa expressed frustration with an online purchase. The product was poorly made despite having over 2000 five-star reviews. When she asked to return it, the company reached out and offered a full refund plus a bonus $20 gift certificate. All she had to do was post a five-star review. She declined the offer and posted an honest review instead. The company responded a week later by increasing their offer to $30 if she would take down her review. Thus, the review process which was once designed to inform consumers was being abused to deceive them.
When it comes to investors who are dealing with their life savings and future, not just some minor kitchen tool, how is someone to find accurate product knowledge so they can make good decisions? My answer to that has come full circle back to where I was before the internet existed. It just takes a lot of hard work. Obtaining knowledge has never been easy and just because access to it is at our fingertips, doesn’t necessarily make it a shorter process. In some ways it has become more difficult. The non-stop contradictory information on the current virus is evidence enough that finding truth rarely comes without a dedicated effort.
I have found these tools essential to discovering investing knowledge today. 1 – Make learning a daily experience, using multiple sources. 2 – Question everything, verifying the underlying data as much as possible. 3 – Research the key individuals involved. As much as possible I like to know the people behind the product. 4 – Invest with the understanding that you will sometimes be wrong. The big picture is more important than individual successes and failures. 5 – Use your own good judgement.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 375 E Riverside Dr, St. George, UT 84790
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