Article by Chris Dillow in the Investors Chronicle, which claims that "advice to buy or sell shares is silly and patronizing".
This is not just because such advice is inaccurate. It is because
you simply cannot advise someone properly without knowing their
particular requirements.
If I already hold a perfectly balanced portfolio, and I already
have perfect information, any advice to me would be either superfluous
or dangerous. If I don't hold a perfectly balanced portfolio, and I
don't have complete or perfect information, the effect of a new piece of
information and/or advice is unpredictable.
An investor receives investment advice concerning a given stock,
and composes this with information and opinion from other sources to
produce a composite picture.
Suppose the investor then decides to buy or sell the named stock,
or some derivative thereof. This action is composed with other actions
(past and present) to produce a given composite investment portfolio
with given risk characteristics.
A valid composition should be aligned to the investor's particular
requirements (objectives and risk preferences). The investor should only
buy or sell if this improves the alignment between the composition and
the requirements. Therefore, advice to buy or sell is not a mass
commodity, to be disseminated to a homogeneous audience of retail
investors, but must be tailored to the needs and circumstances of the
individual investor.
This is an excellent example of Asymmetric Demand
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