Hi J.J,
This is an interesting question, but let me frame it to you this way -
- Do you think that an investor that has the highest returns in 2 years will most likely perform well in the next 2 years, or 20 years?
The answer is no, simply because when it comes to a short time frame, with a sufficiently large pool of investors/ robo platforms, there will be someone doing well by pure luck/chance. That is how the market works.
Which is also why we see people bragging about their successful stock picks, getting XX% returns a year. Does this mean that everyone who employs the same trading or investing strategy will do well? I don't think so.
Rather than just looking at returns, I would rather look at
Tax structuring - are the funds used tax efficient
Diversification - are the funds used sufficiently diversified across geography, industry, and stay sufficiently diversified
Cost - are the platforms low cost? both on fund level as well as on an all-platform level
Investment Philosophy and value proposition - are the platforms trying to beat benchmark returns using already widely traded vehicles, or are the platforms giving access to good fund products?
I think it is easier to think from that angle. Just to share with you, for my cash portfolio, I am largely invested in UCITs ETFs throughInteractive Brokers. I am very happy to accept the fact that some of my friends who stock pick will brag and say they are better because they hit XX% returns. Good for them! I would not say that their method of investing is better than mine just because they do better for now.
The risk taken may be different, there might be hidden costs that we may not know.
Merely looking at returns is not looking at the full picture, even though it is something we care the most about!
Hi J.J,
This is an interesting question, but let me frame it to you this way -
The answer is no, simply because when it comes to a short time frame, with a sufficiently large pool of investors/ robo platforms, there will be someone doing well by pure luck/chance. That is how the market works.
Which is also why we see people bragging about their successful stock picks, getting XX% returns a year. Does this mean that everyone who employs the same trading or investing strategy will do well? I don't think so.
Rather than just looking at returns, I would rather look at
Tax structuring - are the funds used tax efficient
Diversification - are the funds used sufficiently diversified across geography, industry, and stay sufficiently diversified
Cost - are the platforms low cost? both on fund level as well as on an all-platform level
Investment Philosophy and value proposition - are the platforms trying to beat benchmark returns using already widely traded vehicles, or are the platforms giving access to good fund products?
I think it is easier to think from that angle. Just to share with you, for my cash portfolio, I am largely invested in UCITs ETFs throughInteractive Brokers. I am very happy to accept the fact that some of my friends who stock pick will brag and say they are better because they hit XX% returns. Good for them! I would not say that their method of investing is better than mine just because they do better for now.
The risk taken may be different, there might be hidden costs that we may not know.
Merely looking at returns is not looking at the full picture, even though it is something we care the most about!