Do you know anyone who fancies themselves a savvy investor?

[Anonymous]

Anonymous wrote:Define savvy.

A lot of very good investors believe that investing in index funds and being disciplined enough to let it sit there avoiding the temptation to "chase the dragon" is a very savvy move. You tend to avoid outsmarting yourself.

+1. Agreed. For most people that is the savviest move -- slow, steady savings. I think that's NOT what OP's friends are doing. They're obviously saving a lot if they have a 100k to invest here and there, but then it seems like they're jumping on the bandwagons of -- this property will make me rich; or that financial advisor is WAY better than anyone out there, he'll make me rich etc.

[Anonymous]

Anonymous wrote:And acts like their way of investing is the only way - but then they invest in questionable stuff?

I don't talk to people about money in real life bc it's personal, but I have a friend who talks about her investments constantly. She and her DH view themselves savvier than the rest of us "peons who just invest in index funds." Their words. But then they'll tell you they gave 100k to some out of state financial advisor who put it all in energy w/o even talking to them and now he isn't even beating the S&P. Or they'll decide one weekend that they should have an investment property and then go put an offer on one in an over developed area without any real research re is it rentable, how much would it rent for etc and then they'll consider buying said property with an exotic mortgage product so that the property debt isn't just secured by the property itself but also by their other assets. In a way it's impressive that they can throw 100k here and there but in another way it's like - really - are these good investments or just a way to tell friends about your wealth? Anyone run into this?

They: Stupid.

You: Jealous.

Grow up.

[Anonymous]

Yes. Usually they haven't been investing very long, and started in a bull market.

Or else they just aren't informed, and live in a glowy bubble.

Either way, I just nod and smile at their espoused "wisdom."

[Anonymous]

Anonymous wrote:

Anonymous wrote:And acts like their way of investing is the only way - but then they invest in questionable stuff?

I don't talk to people about money in real life bc it's personal, but I have a friend who talks about her investments constantly. She and her DH view themselves savvier than the rest of us "peons who just invest in index funds." Their words. But then they'll tell you they gave 100k to some out of state financial advisor who put it all in energy w/o even talking to them and now he isn't even beating the S&P. Or they'll decide one weekend that they should have an investment property and then go put an offer on one in an over developed area without any real research re is it rentable, how much would it rent for etc and then they'll consider buying said property with an exotic mortgage product so that the property debt isn't just secured by the property itself but also by their other assets. In a way it's impressive that they can throw 100k here and there but in another way it's like - really - are these good investments or just a way to tell friends about your wealth? Anyone run into this?

They: Stupid.

You: Jealous.

Grow up.

Lol -- jealous. Yeah right.

[Anonymous]

Anonymous wrote:Yes. Usually they haven't been investing very long, and started in a bull market.

Or else they just aren't informed, and live in a glowy bubble.

Either way, I just nod and smile at their espoused "wisdom."

+1. I think the bull market effects are very real. When the market keeps going up and property values keep increasing, people forget that they can go back down and start to think any investment is good. And yes, these people tend to give a lot of "advice" bc they think it's their wisdom leading to big gains, not the market. Smile and nod.

[Anonymous]

Anonymous wrote:Confidence is often inverse of actual skill or ability.

+1000

So true.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
They sound insufferable and are clearly losing money on some of their ventures. I hope for them that the rest of their investments compensate for their mistakes.

We have shared with our close friends that we don't rely on our meager research scientist salaries alone to fund our lifestyle, and that some lucky investing in stocks have helped us along the way. We are considering diversifying in real estate as well. However, beyond that initial information, we have not talked about it.

I think some smart people think passive investing via index funds is boring. They think -- well ANYONE can do that, and I'm smarter than just anyone. That's when they start putting their money into more "interesting" things -- whether it's stock picking; or giving money to an investment manager who they are sure is "in the know" etc. I have a colleague like this. We work at a place where we're somewhat limited in what we can invest in (though practically any fidelity/vanguard fund/ETF is fair game) and she constantly complains about how she's missing out on TONS of private placement opportunities bc she is working there.

PP you responded to - I think passive investing is boring, I just don't brag about what stocks I picked
The insufferable part was about how these people bragged, which is quite unseemly and given the volatile nature of stocks, may come back with a vengeance.