Smart Phones, Dumb Decisions: Financial Advisors' Daily Digest
By SA Gil Weinreich :
The smarter our phones get, the dumber we get. So it seems. But in actuality the problem may be less one of cerebral atrophy and more a problem of the absence of barriers to take action that may prove detrimental.
Evan Powers convincingly demonstrates this point in his article " It's Never Been Easier… " on today's SA. Alladin's lamp doesn't hold a candle to today's techno-gadgetry. Evan cites Domino's ZeroClick app, which can get a pizza with your favorite toppings to your door without even a single tap to your phone, as one example. In other words, there's next to no barrier between the initial impulse and its fulfillment. Hanker for globs of gooey cheese and dough to your door and, abra cadabra , it's there. You can worry about the 2,000 extra calories another time.
But a little weight gain is a trifling matter in comparison to the large financial losses a user of today's apps can bring on himself through an insufficiently thought-through investment decision. Let's say you are convinced you found buried treasure in the stock market and quickly buy. Maybe tomorrow, or the next month you get a similar flash of insight. Meanwhile, that initial buy has continued to lose value and you are beginning to doubt the wisdom of the original decision. You sell at a loss, then repeat. These sorts of things happen all the time. As Evan eloquently puts it:
Because technology has enabled us to do so many things that previously required a middleman or a gatekeeper, it's generally presumed that we want to do those things, that we should do those things, and that we can do them all on our own.
But we don't always want to, and if we do want to, sometimes we should not, and sometimes we think we can, but we can't - as evidenced by practices that destroy our financial foundations.
It is thus supremely ironic that our hyper-efficient, high-tech economy that has successfully squeezed out so many middlemen may ultimately be responsible for restoring their standing. Sometimes it's quite beneficial to have a circuit breaker between our unrestrained will and our consequence-bearing decisions. And given the plethora of knowledge and information to which the internet has given us access, it is also to be hoped that investors seeking a financial advisor will be better equipped today to find a good one.
Let us know your thoughts in our comments section. And below please find today's advisor-related links:
- Eli Hoffman's got a link to Michael Mauboussin's 10 attributes of great investors .
- Aristofanis Papadatos: Lessons from my investing mistakes.
- Ian Bezek looks at the investing implications of Trump's reversal on the Keystone pipeline .
- Cullen Roche: Stocks do not make you rich .
- Roger Nusbaum discusses a fund that seeks to harness the VIX as a downside hedge .
- For more content geared to FAs, visit the Financial Advisor Center , sponsored by Franklin LibertyShares ETFs.
See also Lessons From My Investing Mistakes on seekingalpha.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.