Investing can be complex. Building a smart investment strategy and risk management discipline takes work. But an investor is only deemed an expert based on one thing: track record; when someone can turn around and say, “Hey, look! It worked!”
This is the funny thing about tying “expertise” to the practice of risking capital into the unknown future.
Just ask the sophisticated Silicon Valley investors who took the option of selling back their shares of the fizzling podcasting platform called Odeo. The team decided to pursue a side-project that was not what the investors signed up for, so they offered an out.
Most of the time when investors get it wrong, they just lose their money. In this case, they got out of their risky shares in a side project that became known as…Twitter.
Entrepreneurs similarly try to forecast the unknown economic future, then create a solution that fits that forecast and hopefully makes a profit. Whether investor or entrepreneur, the desired results only come from taking responsibility and taking action. No guarantees, but you can’t make shots you don’t take (shoutout MJ).
Whether through advisors or algo-trading, most investment activities are outsourced with little clarity on how and where the dollars are placed. “Trust me, I’m a (program built by) professional.” Can these people/robots be helpful? Sure! But they are not free from biases or privy to the future.
What’s my point? A lack of “expertise” cannot be an excuse for abandoning responsibility. And don’t be intimidated by credentials. When it comes to predicting the future, we are all on level ground. These are your hard-earned dollars and your specific goals we’re talking about.
There is no reason you should have to invest without understanding. Whether you take the responsibility or not, your dollars are on the line. You don’t have to figure it all out at once though, baby steps are better than no steps.
Access and transparency are foundational to microinvesting in private businesses through Vicinity. The whole idea is to learn about a specific business (i.e. investment opportunity) in light of your knowledge and love for the community that business serves.
You can try to out-maneuver Warren Buffet in the stock market, or you can focus on what you know better than he does: your local market.