Due Diligence. Done.

Due Diligence. Done.
By: Nicholas A. Dunlap, CPM

The title should read “Smart”, not “Rich”. Of course, the smart are not always rich and the rich are not always smart. This in response to the Wall Street Journal article headline reading “Rich Investors Trust Bankers More Than Press”. While reporters are writers or journalists, Bankers work in the finance industry and as such have experience with trends and details on an hourly, daily, weekly, yearly basis from a hands-on perspective. The press on the other hand, simply writes about these trends and documents them from an armchair quarterback’s point of view. Ask yourself: would you ask a writer to help you diversify your investment portfolio? Probably not.

Key here is the fact that investors are looking to professionals for counsel, as opposed to doing their own research. This is astonishing on many levels, specifically given the fiscal performance of the stock market and the performance of most mutual funds going back 5 to 10 years. People are not looking to do their own research, they want a professional to locate, identify and present them with an opportunity. While I can understand the need for convenience, I do not understand the lack of self-educating.

Read, study and then read and study more. It is imperative that investors educate themselves on trends and processes relative to the investments they make from the management strategies to the operational platform of the investment vehicle. Due diligence is necessary whether you are investing in Stocks, Bonds or Real Estate.

Read the original article here: http://blogs.wsj.com/wealth/2011/02/15/rich-investors-trust-bankers-more-than-the-press/#