Retail investors have this advantage over fund managers: Phil Town

Описание: Phil Town turned $1,000 into $1.45 million in just five years. The investment advisor, hedge fund manager and best-selling author recently told CNBC what he believes is the biggest mistake investors make today.

When it comes to investing, financial institutions spend millions, if not billions, of dollars on marketing campaigns trying to convince investors that without their expertise and knowledge, all their investments will go bust and leave them penniless.

Phil Town believes otherwise. The former Grand Canyon rafting guide turned professional investor thinks that ordinary investors simply need to educate themselves on the market and quit feeling intimidated. “The biggest mistake people make is to assume that all of these people who are experts in the market know more than you do.”

Town, who turned $1,000 into $1.45 million in just five years, has written two New York Times bestsellers — “Rule #1” and “Payback Time” — outlining his investing strategies. His mantra: “Investing can be as easy as knowing how to shop around and find something great for an even better price.”

One of the biggest things to understand, he says, is the value of the business over a long period of time. “Most people feel like, Oh man, there’s no way I can do that. It’s too much work, not realizing that the market has thousands of companies in it, and shoot, you know there’s a couple out there that you can understand. Are you willing to become educated enough to choose a few companies that you really want to see in the future do well?”

Town closely follows the investing strategies of Benjamin Graham, Warren Buffett’s mentor. One of Grahams biggest strategies was value investing — a strategy for picking stocks that investors believe are underperforming or trading below their intrinsic value and therefore considered cheap. Eventually, these stocks will recover and the investor will profit.

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