Financial Wisdom Becomes Investment Lies

Investment advice is full of mantras that are repeated over and over again and thereby becoming 'truth', at least in the eyes of investors. These last two decades, with two booms and busts, have blown to pieces so much market wisdom that it is shameless that advisors have not turned bright crimson.

Shares outperform bonds: wrong, unless you look at a 30-year timeline.

Government bonds are safer than corporate bonds: wrong, just look at municipal bonds and the current sovereign debt crisis unfold.

Value stocks are safer than growth stocks: wrong, they're not called growth stocks for nothing.

Diversification will protect you: laughable!

"Investing lies we grew up on" goes on to discuss the slippery subject of risk, what it means and how to manage it. All very nice, but for the average investor seems to add a further unknown unknown to the cacophany of market noise. In essence, the buy-and-hold strategy promoted by fund managers sucks big time - though not for those fund managers - and the passive investor has been passively taken to the cleaners. In my opinion, some form of active investing, however basic, can help the neophyte investor navigate these very turbulent seas.