There is no average investor

My blogs are directed to the average investor, but there is no “average” or “typical” investor.

I do not write for the active stock trader or people set on making a killing or those that jump on the latest fad or high flyer. I write primarily for the long term investor concerned about securing their financial position and cash flow and attaining their goals.

I also do not believe there is an average investor. There is, but that is not important because each of us is the primary and important investor that you should be concerned about. For you, you are the average or typical investor. Because of this, the rules of investing cannot be generalized, but need to be customized to what suits you based on your goals, cash flow requirements, temperament, propensity for risk, how long you want to work or whether you want to retire sooner, willingness to alter what you are spending or adapt as major things change, and your knowledge of the tools of investing. There is no average or typical. Each person needs to do what is best for them.

For that reason, I ask each of you to become very selfish. You need to look at every investment recommendation with skepticism and should ask each time an investment is proposed “What’s in it for me?” WIIFM! What’s in it for you should be:

  • a defined risk that is clearly explained and which you understand and are willing to accept
  • a potential for growth if you invest in equities
  • a very high potential to get your money back at a set term if you invest in fixed income
  • predictability of sustainable cash flow in the form of interest and/or dividends
  • liquidity meaning you can easily convert your investment into cash should the need arise, BUT if there is a distinct possibility you might need the cash sooner rather than later, then I suggest you should pass on the investment and keep your money in short term funds.

Investing is confusing. Planning for specific goals and your financial security is also confusing. Combining the two is confusing. Further, many pass on even the slightest effort to become familiar with what is recommended to them in effect delegating their important decisions to people that might not have their best interests in mind. Don’t settle. Do not be an average investor. Be a concerned and selfish investor. Know what’s in it for you. Ask, understand and know WIIFM!

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