Global Predictions

@alexharm @portfoliopilot Ready!

Big news! @portfoliopilot hit $30B AOP and I’m finally a media mogul 🧐🎩🤑 We spent $1M to acquire diversification(.)com to set a new bar for investing. Launching contest ($240,000 in prizes) to find out just how diversified America is. Below for details on how to win 🧵

Just in case you were wondering how @portfoliopilot offers financial advice

The more educated you are, the more likely you are to vote democrat. The chart below shows how counties with higher percentages of college-educated citizens tended to lean left as a whole. So, my question is: Does the education lead to adopting a more leftist perspective? Do colleges indoctrinate students and nudge them towards adopting these ideals? Or am I thinking about the cause and effect backwards, and left leaning people are the ones more likely to pursue a college degree? 🤔

Eliminating an entire 10-person QA testing team for only $200/mo - so exciting I could not sleep properly last night...@sama @ChatGPTapp why are you charging so little?🫢 We used #Operator to autonomously test @portfoliopilot, our AI financial advisor. AI testing AI, what a world. Told it to click through everything in our product and see what breaks. After 15 min of clicking, it found a few actual bugs and page loading issues - eng team is fixing that now. Note from compliance: this is a demo environment set up for illustrative purposes only and does not constitute financial advice. Create an account to get actual financial advice tailored to your situation.

@portfoliopilot So, you are saying that there are no benefits to human financial advisors whatsoever?

Investing with a human financial advisor might be a calamitous decision if you are not careful!! Human financial advisors might end up losing your money, and the average investor might be best served by investing in a broad index. And this comes from the scores of stories we have witnessed firsthand as well as the ones we have found online. Think we are exaggerating? Look at the study published back in 2012 from Hackethal, Haliassos, and Jappelli, three researchers from Europe. In the study titled “Financial advisors: A case of babysitters?” the researchers wanted to answer a few questions, including: How do accounts managed by financial advisors perform against self-managed ones? And, what did they find? 1. Accounts managed by advisors achieved worse returns and risk-return ratios (i.e. Sharpe ratios) in comparison to self-managed funds. 2. A big reason these advised accounts did worse is attributable to trading costs since the researchers found that advised accounts had higher turnover, especially as a lot of advisors make their money from commissions. This is what the paper had to say in its Abstract Section: “… advisors are associated with lower total and excess account returns, higher portfolio risk and probabilities of losses, and higher trading frequency and portfolio turnover relative to what account owners of given characteristics tend to achieve on their own.” Here is another section of the paper that might shed some light on why we are not fans of human financial advisors: “Our findings imply that, even if advisors add value to the account, they end up collecting more in fees and commissions than what they add.” So, what do we believe is a good alternative? Instead, we believe that investors are best served by the following: Learn how to manage your money. Financial literacy is the best investment you can make Divsersifying your funds might be a good idea, and you might want to consider investing in an index rather than stock picking. The best advice here is to keep it simple and to avoid overcomplicating it. If you are to reach out to a financial advisor, they might be able to help with several aspects of your finance, but it is your responsibility to understand their incentive structure and to know when their interests run counter to yours. P.S. If you want to see how scary a bad financial advisor can be, check out our financial human advisor horror stories on our feed!!

@portfoliopilot If the results are so heavily weighed against active management, why do you think it is still so popular?

Our advice to most of the investors here on X is: “DO NOT PICK STOCKS HOPING TO BEAT THE MARKET!! If you are an active investor, you might underperform the overall market (e.g. bringing in 6% when the market brings in 8%), and that’s a good-case scenario. The bad case is you might just lose your money. To really understand why, we’d love to introduce you to Larry Swedroe (@larryswedroe). Larry Swedroe is the Cheif Research Officer at Buckingham Wealth Partners, he’s written several investment books, including “The Incredible Shrinking Alpha.” And he is experienced on active vs passive investing. So, he knows what he’s talking about. And he has research to back up his claims! In a nutshell, Larry argues that stock picking is highly unlikely to outperform passive investing, and things are only getting worse for active managers. Why does he believe that active management is a losing exercise? 1. He believes that today’s markets are pretty efficient, so there aren’t a lot of pricing errors for investors to benefit from. A big reason for this is that almost 90% of trading happens by large institutional investors, i.e. Goldman Sachs and Morgan Stanley. These institutional investors have superior information and capabilities compared to the market, so they don’t make too many mistakes when pricing assets. 2. There aren’t a lot of victims to exploit in the market. After all, for someone to make a killing, there is usually someone else at the other end of that trade that got the worse end of the deal. 3. When you look at the caliber of the people working in those large institutions, i.e. PhDs and mathematicians, you realize how cutthroat the competition is. Moreover, those very smart people have access to tools that the average retail investor could never afford. And the numbers prove Larry’s point: The S&P 500 does research to see how actively managed funds are performing relative to it. What it found is that after 10 years, almost 85% of large-cap funds underperformed it. And within 15 years, almost 92% of professionally managed large-cap funds underperformed the S&P 500. So, to summarize, stock picking as a new investor may do more harm than good.

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🇺🇸 US Retail Sales are set to beat expectations in tomorrow's release. 📊 After the last surprise dip, let's see how the markets react! 📈💥 #RetailSales #MarketWatch portfoliopilot.com/economyExplora…

We’re excited about the journey we’re on to help self-directed investors make better decisions in a complex economy. Thank you to Finance Magazine for showcasing us. finmag.co.uk/company-showca…

These companies are powering small businesses and could benefit from the optimism according to our #AIEquitySearch portfoliopilot.com/economyExplora…