FinanceBlog

How not to Invest

Investors know the simple rules of investing. They are diversify, don’t chase big returns, and don’t think you can out smart the market. These simple rules are easy to follow and if they are followed correctly your investment will be successful.

However in a recent survey of financial professors who analyze the market, it was discovered that many of these professors don’t follow these simple rules. When asked how they invest, only one third of the professors replied that they diversify their investments.

Although these professors teach complex investments theories to their students, they do not practice what they preach. Not only do they not take what they say into account they invest in stock in which the price is on the rise. Professors say that when it is their own money that they are investing, they are investing to beat the market and to make as much money as possible. Many say that the theories that they teach are written by professors who have never tested their theories in the actual market.
The professors say that in the real market situation, these theories are hard to put into practice, and therefore it is hard for them to utilize the skills that they teach to their students.