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January 2016 Issue of PFwise.com's Monthly Newsletter
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PFwise.com Monthly Newsletter

Help you make wise personal finance decisions

Hello friends, Happy 2016!  Welcome to the January 2016 PFwise.com Monthly Newsletter!  

It's time of the year many people make predictions - where to put your money, what stocks to buy, etc.  Unfortunately, I don't have the crystal ball, neither do I believe anyone has it.  Instead, I want to focus on the following topic in this newsletter - could small investors compete with the Wall Street pros?

Imagine you were given a chance to play in the NFL against the faster, stronger, and more powerful opponents.  Would you take the opportunity or be realistic about it?

I believe many people will make the rational choice.  However, don't give up when it comes to the stock market.  As a small investor, you have 3 great advantages over the Wall Street pros.
 
1. Size Advantage
When it comes to portfolio management, the smaller actually means the better.  As I described in this blogpost, a small investor has a big advantage over professional money managers: you don't have to worry about revealing your positions, you don't have to worry about getting in and out of a position quickly, you don't have to worry about darkpools ...

2. Time Advantage
A small investor means you are your own money manager.  You can set any time frame you like, which typically is long term.  On the other hand, as I argued in this blogpost, Wall Street pros face lots of constraints: they have to window dressing at quarter end, they have to avoid some necessary risks therefore missing the gains that come with the risks, they have to keep an eye on their benchmarks while you can set your own ...

3. Cost Advantage
You might not realize it, as a small investor, you have a cost advantage.  You don't have to rent the corner office at the prime office building, you don't have to hire a research team flying all over the globe searching for ideas, you don't have to pay high commission costs because discount or even free brokerage options are available ... 

Thank you for your readership!  I hope this newsletter gives you the confidence and helps you take the right actions that truly utilize your advantages and win in the investment competition!

If you like our newsletter, please share with your friends.  They can subscribe by dropping a line to help@pfwise.com or click here.

The Bottom Line
 
Personal Finance is a broad and complicated topic, and needs lot of knowledge and forward-looking planning.  I hope I can share my knowledge and use my skills to help you make wise PF decisions.

Kaisheng (Kenny) Bao, CFA, MBA
Independent Agent
National Producer Number 16505199
PFwise.com
(571) 482-9394


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