Welcome!

News Feed Item

Renowned Financial Advisor, Psychologist and Forbes Contributor Dr. Phil DeMuth Finds Investors Share Many Characteristics with Schizophrenics

Distinct sub-personalities common in investment advisors' profiles can lead to catastrophic consequences

NEW YORK, Jan. 30, 2014 /PRNewswire/ -- Best-selling author, Forbes contributor, and renowned financial advisor & psychologist Dr. Phil DeMuth says, "The simultaneous presentation of Nobel Economics Prizes to Professors Fama and Shiller, who hold diametrically opposite views of the stock market, illustrates a fundamental problem with the state of financial economics today. However, there's good news: this problem completely disappears once you realize that investors are insane."

(Photo: http://photos.prnewswire.com/prnh/20140130/PH55470 )

As DeMuth describes it, investors have two distinct sub-personalities. There is a conservative "Dr. Jekyll" type, who only cares about downside risk. Jekyll prefers gold and Treasury bills. He is counterbalanced by the thrill-seeking Mr. Hyde, who writes naked calls on margin. The problem arises because both of these investors uneasily co-exist within the same human being.

Advisors Are Dazed And Confused

Investment advisors are dazed and confused by their client's behavior because they assume they are dealing with a unified individual. Instead, they never know which sub-personality they will get on the phone. It invariably turns out to be the opposite one from the last time they talked, calling to complain that everything done based on the previous conversation is wrong.

Buy High, Sell Low

The split personality that emerges is the one who is winning now. Gold goes to 2000? Jekyll can hardly wait for China (Europe) (the Middle East) to collapse. Is the NASDAQ at 5000? The next stop for Hyde is Dow 36,000. Then, when the market turns, the other personality pops up and sells everything at exactly the wrong time.

Catastrophic Consequences

As DeMuth describes it, this schizoid investment process leads investors to precisely the clinical situation in which they find themselves:

                -- Perpetual dissatisfaction and misery; sleepless nights under all market conditions

                -- Always hunting for some new thing that will resolve the contradiction (hedge funds? structured products?)

                -- Severely compromised long-term investment returns; retiring on empty

About Phil DeMuth

DeMuth's first solo endeavor is The Affluent Investor. He's co-authored nine bestselling books with economist Ben Stein (including the Yes, You Can series Yes, You Can Get a Financial Life, Still Retire Comfortably, Supercharge Your Portfolio, Time the Market, Become a Successful Income Investor, Can America Survive?) and "The Little Book of Alternative Investments and Bulletproof Investing…" series). Both a psychologist and registered investment advisor, he's written for The Wall Street Journal, Barron's, the Journal of Financial Planning, Human Behavior, and Psychology Today.  He's been quoted in The New York Times, Fortune magazine, Yahoo! Finance, theStreet.com, On Wall Street, "Profiled for Success" in Research Magazine, hundreds of outlets, and CNBC, Forbes on Fox, Fox & Friends, FBN, Bloomberg, WEALTHTRACK, and Wall Street Week with Fortune. He's Managing Director of Conservative Wealth Management LLC, a SEC-registered investment advisor to high-net-worth individuals and, their families.

Articles can be found at http://www.forbes.com/sites/phildemuth/ 

Contact:
Monique Mallory
(o) 212-447-6146
(m) 917-509-6052
Email

Read more news from Dr. Phil DeMuth.

 

SOURCE Dr. Phil DeMuth

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, discussed how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved efficienc...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
"We view the cloud not really as a specific technology but as a way of doing business and that way of doing business is transforming the way software, infrastructure and services are being delivered to business," explained Matthew Rosen, CEO and Director at Fusion, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., and Logan Best, Infrastructure & Network Engineer at Webair, focused on real world deployments of DDoS mitigation strategies in every layer of the network. He gave an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He also outlined what we have found in our experience managing and running thousands of Linux and Unix ...
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
With 15% of enterprises adopting a hybrid IT strategy, you need to set a plan to integrate hybrid cloud throughout your infrastructure. In his session at 18th Cloud Expo, Steven Dreher, Director of Solutions Architecture at Green House Data, discussed how to plan for shifting resource requirements, overcome challenges, and implement hybrid IT alongside your existing data center assets. Highlights included anticipating workload, cost and resource calculations, integrating services on both sides...
In his session at @DevOpsSummit at 19th Cloud Expo, Yoseph Reuveni, Director of Software Engineering at Jet.com, will discuss Jet.com's journey into containerizing Microsoft-based technologies like C# and F# into Docker. He will talk about lessons learned and challenges faced, the Mono framework tryout and how they deployed everything into Azure cloud. Yoseph Reuveni is a technology leader with unique experience developing and running high throughput (over 1M tps) distributed systems with extre...
"We are a well-established player in the application life cycle management market and we also have a very strong version control product," stated Flint Brenton, CEO of CollabNet,, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
"Software-defined storage is a big problem in this industry because so many people have different definitions as they see fit to use it," stated Peter McCallum, VP of Datacenter Solutions at FalconStor Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.