| ??? 08/20/12 11:06 Read: times |
#188099 - Biased sample selection. Responding to: ???'s previous message |
Richard Erlacher said:
Some people believe that one can manage his retirement resources better than the government can. To some extent, that depends on the government in question, of course, but everyone I know, who has a substantial net worth, tells me that nobody, no professional nor any amateur, can manage your money better than you. After all, if YOU manage it, it being YOUR money, you won't do anything ridiculously risky, right? Not intentionally. There is still plenty of opportunity for doing risky or even downright unprofitable things, since no one has perfect information to base their decisions on. (Unless, of course, you stick with investments that are universally known as being safe, and watch your money being devalued by inflation faster than your investments appreciate.) Also, the group of "everyone I know who has a substantial net worth" basically excludes people who a) manage their finances themselves and b) are bad at managing their finances themselves. This sounds like a classical example of a selection bias. The more realistic statement I've heard is that you have a 50% chance of performing better than a "professional", meaning that on average, there's fairly little point in paying for a professional. |
