It started with a conversation where I said something like, “I’m not talking about overly sophisticated investors, I’m just talking about folks who know what a P/E ratio is.” And she said, “I don’t know what that is.” And I said, “You know a price-to-earnings ratio?”. The reply, “Nope!”
So I asked other people I know — smart people. And good fraction of them, over 1/3 said they did not know what a P/E ratio is. And these are people who own stock. In some cases hundreds of thousands of dollars worth of stock… company stock!
If you read this finance blog much, you probably know that I’m not a fan of most investment advisers. However, if you don’t know what a P/E ratio is, maybe you should find a good one. One who can explain the benefits of diversification… convincingly and persuasively.
Its not that these people couldn’t learn. Its just that they don’t want to. REALLY don’t want to.
Well, I guess there are people like that. And I am unlikely to change their mindset.
However, for people with an open mind, this is the finance blog for them. Finance is my passion. Few people are so wrapped up in finance. That’s cool. I’m writing for folks who care a little bit about finance. Folks who realize that their investment decisions are important to their future.
Investing is serious business, but it is not hard. Really. The hard part for some is overcoming their emotions around investing. But investment choices don’t have to be.