Financial Education is imperative and should be taught very early on so everyone has a level playing field, especially in an era of rising inequality. When it comes to investing in stock market or investing in general, you should not be your own enemy.

Stocks, bonds, commodities and alternative investments are sometimes used emotionally while making investing decisions. Investors sometimes fear stock market crash and at other times are motivated by greed, but a rational thinking based on sound logic should dictate your investment decisions.

Many investors and traders are seeking alpha by finding specific stocks to buy without having financially literacy or genuine investment education. Learning how to beat the stock market or how to invest in stocks takes dedicated time and effort. Even professionals have hard time beating the market.

Both active investing as well as passive investing should be viewed with respect to risk-adjusted returns. We invite you to get financially educated, so that no one can ever dare to call you dumb money. Traders should be very careful when using complex products in their trading. They should evaluate the risks first and rewards later. Financial education, investing books and trading courses and coaching available online are loaded with misinformation.

Today I would like to talk about 5 reasons why we are on a mission to empower individual investors and traders with financial education.

Isn’t it ironic that throughout the world, the US is considered a financial superpower but many of its citizens remain financially illiterate & completely ignorant when it comes to comes to managing their money and planning for their future. According to the Milken Institute Only 57% of adults in the United States are financially literate. While a majority of parents say they are responsible for teaching children about finances, 31% say they never talk to their children about the topic.

Some of you may not have heard the name of an independent investment research firm Dalbar Inc. But they have been conducting research on Investor Behavior since 1984. If you ever followed their research you would have noticed a consistent theme keeps coming up. What Dalbar research studies have shown is, that investors are more often than not, their own worst enemies, when it comes to investing. Their most recent study shows that over the last 30 years, the average equity fund investor has realized a 7.13% return vs. the S&P 500 index return of 10.65%. Now this 3.52% difference may not sound like much but its costing investors a fortune. In terms of dollar amounts, an investor who invested 100K would have grown their investment to about 789K at an annualized rate of 7.13% and to more than 2 million dollars at an annualized rate of 10.65%. You see That is more than $1.2 million difference. I have put a link in above to the excel sheet I’ve put together to prove this if you would like to run these numbers yourself.

Professor Daniel Kahneman won the Nobel Prize in 2002 for his work on behavioral finance. Kahneman points to the fact that one has to be extremely cautious in financial decisions. He shows that when it comes to investing people make irrational decisions. He shows that it may feel like that people believe in something because they have the arguments for it, but it works the other way around. People believe in the conclusion, and then they create supporting arguments. Kahneman shares some advice on how to make important decisions. “You should slow down and get advice from a particular kind of person. Somebody who likes you but doesn’t care too much about your feelings. That person is more likely to give you good advice.”

Retail traders and stock pickers and typically considered dumb money by wall street. They generally lack the knowledge and are not sophisticated enough. Now sometimes they do become a powerful force and get noticed by creating large swings in some stock prices. But with that exception, they can be easy prey for brokers and hedge funds. Also, you may have noticed that many a times inexperienced investors get greedy and buy the market at market tops and then get panicked and sell the market at market bottoms. In fact, they should be doing exact opposite, as Warren Buffet says, sell when others are greedy and buy when others are fearful.

Finally Retail Trader are jumping into “complex” products such as options, futures, leveraged and inverse ETFs without really understanding the risk of these products and how these products can be a double-edged sword? They are using penny stocks, bitcoins and Non-Fungible Tokens in hopes of making a quick buck, without understanding how fast and how much they can lose their hard-earned money.

To Summarize:

1. We believe that Financial Education is imperative and should be taught very early on so everyone has a level playing field, especially in an era of rising inequality.

2. When it comes to investing you should not be your own enemy.

3. A rational thinking based on sound logic should dictate your investment decisions.

4. Get financially educated, so that No one can ever dare to call you dumb money.

5. Finally, when using complex products, you should evaluate the risks first and rewards later.

We believe that if we bring awareness of these challenges investors face, we are adding a significant value to help them realize their financial goals. That’s why Our missions is to empower 100,000 people through financial education so that they can attain financial freedom and pursue their true purpose in life.

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