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I know what a mutual fund is. I can even engage in a semi-literate discussion involving things like alpha, beta, inverted yield curves, and etc. On the other hand, I’d be lost in an in-depth conversation with the likes of a Grossman, Clements, or certain other HD contributors. So how much knowledge does one actually need to manage their own investments without the need for paid help?
There isn’t that much to know. Stock or bond ETFs, what percentage in each and start investing early in your life. As much as you can.
I tried it for a long time. I think it works, I think
https://humbledollar.com/forum/dart-board-investing-what-me-worry-i-may-not-be-a-good-example/
A quote from Jason Zwieg of the Wall Street Journal: “It’s remarkable how much you have to learn to find out how little you need to know.”
If I went from debt to Powerball winnings, I think I would hire someone. As a normal investor over decades, starting with a few good books and your bank/brokerage site would maybe be a good first stop. As Jonathan headed education at a bank, I would be curious to know if he thinks the banks/brokerages do a good job for the new investor. I cannot keep up with the amount of material that Fidelity and Morgan Stanley kick out. TIAA could do a better job, ironically for all their work in the education industry. I started by reading Your Money or Your Life way back and went from there.
So much depends on both the investor and the advisor. If you combine an ignorant investor with an unscrupulous advisor, all kinds of mayhem can result. Favoring fee-only fiduciaries will help. But before an investor walks into an advisor’s office, he or she needs at least some financial education. All too many, alas, go in totally ignorant — which is astonishing when you think of the financial stakes involved.