Big Investment Lie

In July 1971, Michael Edesess, having received a Ph.D. in mathematics, started his first job, performing theoretical work on the stock market at a major brokerage firm. Within months he realized something was askew. The academic findings were clear and undeniable, but the firm'and the whole industry'paid no real attention to them. Theories and evidence both showed that professional investors could not beat market averages. A typical study in The Journal of Finance concluded: 'The evidence on mutual fund performance discussed above indicates not only that ' mutual funds were on average not able to predict security prices well enough to outperform a buy the-market-and-hold policy, but also that there is very little evidence that any individual fund was able to do significantly better than that which we expected from mere random chance.' Professional investors couldn't even predict stock prices better than the nearest taxicab driver. Yet the entire business was based on the falsehood that they could. It was as if theoretical physicists knew the laws of thermodynamics but, nevertheless, the business of engineers was selling plans for perpetual motion machines. The Big Investment Lie is that an investor will gain by hiring professional advisors and managers to beat the market. Widespread acceptance of this lie allows an entire industry to prosper lavishly. But an investor will almost surely lose'more than they imagine'by hiring professional help. Over a long career Edesess observed, often aghast, often as a deeply-placed insider, while the pitch for the Lie became more elaborate, and outlandish fees for a worthless service actually increased. In The Big Investment Lie, Edesess shows how to break free from this pervasive falsehood. By following his Ten New Commandments for Smart Investing, investors will maximize their long-run wealth and achieve their best possible financial future.MILLIONS OF PEOPLE ARE JUST THROWING THEIR MONEY AWAY: People across all income levels are poorly informed about financial matters, making them easy marks for the investment industry's astronomical fees that yield negligible results. This work aims to make crystal clear what the Big Investment Lie is, how it is sold to us, and what we can do to avoid it. WHISTLE-BLOWER AUTHOR: Having worked in the financial advisory industry for decades in executive positions and as a trained theoretician observing first-hand how the market functions, Edesess has unique experience, knowledge, and authority to expose the doctored statistics, the skillful marketing, and the further details of how the Big Investment Lie is pulled off. MUST-HAVE INFORMATION FOR SMARTER INVESTORS: Not only does Edesess bring to light the industry's systematic manipulations, but he also provides true, rock-solid guidelines and free advice as to how and where people should invest their money with his 'Ten New Commandment for Smarter Investing.'