Here's What No One Will Tell You About Investing | Phil Town

Mr. Phil, you asked what confuses me the most? To me my question is what really causes the markets to go up and down? Does the banks, central banks get together and have a future plan, or by the Treasury or peoples' speculation…..? Kinda curious.

CFA here that used to work in the industry. Mixed feelings about the points in this video
. Here's the straight unfiltered goods from a former insider:

1) You can do better than any financial advisor – Maybe

For the general population who knows nothing about financial markets, no chance. For people that have some industry knowledge and are fairly savvy, then yeah probably.

The financial advisors he's referring to, who are for the average Joe with no account minimums, are not very qualified.

Any decent advisors move up to become discretionary portfolio managers (on the retail side, or move onto institutional money management). They have multi-million dollar account minimums.

Generally, they will do better than you can even net of fees. Also, certain ones provide other benefits like access to hedge funds if you have the net worth to be an accredited investor. Market neutral hedge funds are an awesome tool to protect against market downturns.

It's not as hard as you think – disagree

Disagree with the notion that you can go and pick a bunch of great stocks that will do better than the market just by reading a bunch of financial statements. Financial statements are publicly available – if it were that easy everyone would be rich. Stock prices adjust right away to financial statement factors – you're not gonna discover some secret that no one else knows by reading them.

What really matters for stock prices:

– The overall stock market direction ("Beta") – This is by far the biggest factor. In 2008/09 everything went down. Since then, almost everything has gone up big.
Regardless of the company's quality.
– The industry the company is in – All companies in a certain industry (tech for example, although in reality it's much more granular than just 'tech') tend to move in a similar direction at the same time. Takes experience to know which industries will do well during which times.

– For company specific factors, predicting company stories and news events (i.e. acquisitions, corporate restructurings, changes in business strategies) is how people really pick better stocks. This is why equity analysts spend most of their time talking to people (company management, industry colleagues, other connections) rather than analyzing financial statements.

The general public will not be able to predict these because they don't have access to the right people and information. They're better off staying away from picking individual stocks for this reason. Most people should go with index ETFs or sector ETFs.
The people with the absolute best information work for exclusive small hedge funds that no one knows about, which are only available to certain accredited investors. These funds kill it – 60-100% gains a year.

2) Don't have to over-diversify – agreed

Diversification is overrated and over-diversification is pretty rampant. Pick your best ideas, be right, and reap the rewards. Don't get dragged down by worse ideas for the sake of diversification.

3) Invest when the market is going down – obviously.

Can't always do this though. If you had waited since 2010 for the market to crash, you'd have been waiting 9 years and missed the biggest bull market of all time.

4) Investing terms are to confuse you – uh…no?

Investing terms, like any language, are created because we need a way to describe certain things. You think investment professionals sit around in an office making up words…to confuse people? Too busy to do trivial crap like that.

Also re: the notion that managers are out to get you: Not really. Yes, most managers will do what maximizes their compensation sometimes at your expense. However, they also need to worry about your portfolio's performance. If the performance sucks compared to everyone else, you the client will be pissed and take your money elsewhere and they lose their book. Then they get fired.
So to maximize their compensation, they need to keep your performance up so you stay happy and don't leave.

5) Getting rich takes time – agreed

Compound interest over time is much more important than being a savvy investor.

Do you think it's worth investing in Vanguards Lifestrategy funds? Is that still vulnerable if a finacial crash occurs?

Great video Mr. Phil. Do you know how can I invest in the American stock market from Latin America ?

Thank you sir…

Hello, so can I pick 5/6 companies that I like and invest in them and use compounding interest.

One tiny query. Since we buy low, is it alright to sell when the stocks reach a certain price or not sell and wait for it to correct a bit again so that I add on some more. Due to selling and profit realisation we will have to pay tax. Rather accumulate every time it's corrected and not sell for a long time frame?

Mr. Phil, can you do a short video on the best dividend stocks. Thx u

Mr Phil, could you make a video on how to properly read quarterly reports and other important financial documents??
Thank you!

Save your money and wait for the crash.

i am 16, i did my first investment 2 years ago, it is actually fun investing in the stock market

What confuses me the most is how do I get interest on the money I've invested? Let's say, for example, I have $1,000 and I decide to invest in in a great company that fits the criteria. How do I start getting interest in my investment? That's the one thing I fail to understand and it bugs me really badly. Everyone keeps throwing around a 10% interest rate, as an example, but nobody mentions how you acquire that interest. From what I've learned so far about investing, you can only make money from buying cheap in selling low or from dividends. So, if that's the case, how do I get an interest on my initial investment if I don't sell the company or if the company doesn't issue dividends, as most companies don't.

I'd really like for anyone who knows the answer to help me understand. I'm really interested in starting to invest, but I want to understand the whole process properly so I can make educated decisions. I'm currently investing in my own business, but I have about £200 in disposable income every month after I do that, so I'd like to invest this in stocks.

If I am to invest £200/month for the next year (£2,400) in total, how should that be done? Should I buy £200 worth of stock every month or rather keep the £200 and only buy when the company is undervalued? From what Phil say, I should keep my money and invest it when the time is right, but I want to start now and take advantage of compounding interest at the same time. So I'm really confused about how to go about.

Thank you in advance for any help and support, guys!

If you can I know you're busy and you have a lot of things to do but if you can tell me if that was a good idea or not please thanks

I work I have a 4 to 7 job I decided to lower the percentage because I really think the Market's going to go the other way and when it does I think I might raise that percentage I mean I can't get out of that because they say once you work for the company you have to stay with the 457 plan which the company does not contribute but I've doing something so I'm thinking about lowering the percentage and when the market does crash raise it

How do I start investing on my own? Any app or webs

Your videos are so valuable and full of knowledge.

How to know what company is undervalued to buy is hardest part.

Hi Phil. Very helpful video, thank you so much for all your efforts!
I have been reading up on lot of best advised books and had a question.

Considering one holds a business with sound fundamentals in a market that has become overpriced overall (the stock is also trading at a price a little above the intrinsic value, lets say 120%)…..should one take gains (or some gains) or stay invested?

PS: Phil Fisher in his book 'Common Stock and Uncommon Profit' advises to stay invested, hence the question.

Good stuff. Love the video.

Can you do a video about company revenue and it is so important and not profit.

Mr Phil, could you make a video on how to properly read quarterly reports and other important financial documents??
Thank you!

Where is the place to buy business where they are low or in sale? Stock market? Or small business that aren't on stock market? Thanks.