"you need to have a longer time horizon" roughly translates in my book in "Run for your lives !!".
For one, if you are a final saver... you rarely HAVE a time horizon, nor you need one. Incidentally that's proof of who wrote #MIFID.(/)
For one, if you are a final saver... you rarely HAVE a time horizon, nor you need one. Incidentally that's proof of who wrote #MIFID.(/)
https://twitter.com/INArteCarloDoss/status/1633846852780163075
MIFID questionnaires have a mandatory section on time horizon. Why that measure? because while for an individual saver that concept is basically meaningless, for those meant to be KEPT from pushing unnecessary risk onto savers it's daily bread.(/)
Banks indeed have time horizons and time preferences well and truly planted into their brains since they have a teeny weeny share capital, and finance their assets through the issuance of debt. They indeed try to match maturities across assets and liabilities. (/)
Hence when regulators had to avoid them selling whole life monthly life policies to 82 year old grannies (been there, seen that), the regulators purposely put the concept in a way which is meaningless for people, but second nature to their flock of wild sheep. (/)
When I say that time horizons are meaningless for savers, I mean this: in debt and generally across asset classes, time to maturity is ONE of the risk aspects. (/)
Unless an individual has a future fixed liability like banks (i.e. mortgage, retirement in case it's not provided for by the state or the employer), asset maturity is a very weak aspect to consider. Raise your hands those who correctly predicted the present five years ago.(/)
See? people usually don't know within a reasonable accuracy range where they WERE ten years ago. Why should they know know if they prefer 3,5, 10 year time horizons?
The point is, the assumption is that they would bear stoically any loss before the picked horizon.(/)
The point is, the assumption is that they would bear stoically any loss before the picked horizon.(/)
Sorry, that's pixie dust carried to you personally by the tooth fairy. people will squeal like slaughtered pigs if they lose 30% irrespective of the time horizon. Ah, do you want to know the time horizon if the poor sod who manages your "long term opportunities fund"?(/)
One month, tops. if he or she screws up another monthly performance vs. Benchmark after the first monthly one, he is a goner, and your "long term view" be damned.@INArteCarloDoss @petunianelsole @AvidCommentator @AlessandroPonz4 @jeuasommenulle @CNBCJou @DavidBCollum
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