Quotes About Investors

Around the world, businesses and investors are increasingly taking action to climate-proof their own organizations.

Many U.S. investors are already investing overseas rather than at home.

By 2016, when the Democrats faced off against Donald Trump, there were virtually no immigration skeptics remaining on the left. The same politicians and intellectuals who had once acknowledged a need to enforce the border and protect workers now disavowed their old views and suggested those who still held them were racist. The Democratic Party had given up trying to represent the working class, in favor of investors and welfare recipients—and by 2016, illegal immigrants.

Unsuccessful investors' greatest weakness is not understanding their financial situations and how stocks fit in. Often, I counsel people to stay out of the stock market if they aren't prepared for the responsibilities of stock investing, such as regularly reviewing the financial statements and progress of the companies they invest in.

Lack of knowledge constitutes the greatest risk for new investors, so diminishing that risk starts with gaining knowledge.

Artists need a lot of collectors, all kinds of collectors, buying their art.

Environmental influences almost invariably point investors down the path to investment failure. Advertisements flog stocks at equity market peaks, with nary a mention of diversifying fixed-income assets. After stocks suffer bear-market losses, the media tout the beneficial effects of owning bonds as an important part of a well-balanced portfolio. The overwhelming bulk of messages to investors suggest owning yesterday's darling and avoiding yesterday's goat.

Poor asset allocation, ill-considered active management, and perverse market timing lead the list of errors made by individual investors.

Fidelity to asset-allocation targets requires regular purchase of the out-of-favor and sale of the in-favor, demanding that investors exhibit out-of-the-mainstream, contrarian behavior.

Market participants willing to accept illiquidity achieve a significant edge in seeking high risk-adjusted returns. Because market players routinely overpay for liquidity, serious investors benefit by avoiding overpriced liquid securities and by embracing less liquid alternatives.

On initial investment, investors frequently pay a load, or sales charge, to acquire shares. Loads range up to 8.5 percent, sometimes varying with the size of investment and length of holding period. Funds without sales charges carry the no-load designation.

While astute mutual-fund investors avoid loads, all holders of mutual funds pay management fees.

Sensible investors avoid corporate debt, because credit risk and callability undermine the ability of fixed-income holdings to provide portfolio protection in times of financial or economic disruption.

Junk-bond investors cannot win. When fundamentals improve, stock returns dominate bond returns. When rates decline, noncallable bonds provide superior risk-adjusted returns. When fundamentals deteriorate, junk-bond investors fall along with equity investors.

From a superficial perspective, tax-exempt bonds appear to offer investors the opportunity to place fixed-income assets in taxable accounts (where their special tax characteristics lessen or eliminate tax consequences), freeing capacity in tax-deferred accounts for higher-tax-burdened assets. Regrettably, the problems of credit risk and callability lessen the appeal of tax-exempt bonds to investors.

The dollar-weighted and equal-weighted Lipper data indicate that in recent years, investors drank one of two poisons: the burden of higher fees or the drag of larger portfolios.

Within the realm of active equity management, investors inhabit a perverse world where higher fees correspond to lower returns. In the broader universe that includes active and passive management, index funds exhibit a dramatic cost advantage over their actively managed counterparts. Well-informed investors recognize that fund fees matter.

Asset-backed securities involve a high degree of financial engineering. As a general rule of thumb, the more complexity that exists in a Wall Street creation, the faster and farther investors should run.

Casual commitments invite casual reversal, exposing portfolio managers to the damaging whipsaw of buying high and selling low. Only with the confidence created by a strong decision-making process can investors sell mania-induced excess and buy despair-driven value.

In an extraordinarily offensive maneuver, a number of mutual-fund companies continued to charge 12b-1 fees even after the management company closed funds to new investors.

Security selection may provide substantial excess returns to skilled investors, but those excess returns come directly from the pockets of other players who suffer poor relative returns. When aggregating the returns for all actively managed portfolios, the combined results inevitably mimic the market, less a discount equal to the amount paid to play the game. For the investment community as a whole, security selection plays a return-reducing role in investment performance.

By relying on the decisions of others to drive portfolio choices, investors fail to take responsibility for the most fundamental fiduciary responsibility—designing a portfolio to meet institution-specific goals.

The aggregate of the compensation paid to mutual-fund managers virtually guarantees that investors fail to achieve market-beating results.

Sure, investors do tend to overreact, but they are investing real money based on doubtful information. Complacency or a wrong move sees their money literally vanish into thin air.