Reply #73: Model investors, Americans are not (So let's get them to put even MORE [View All]

[54anickel]

of their retirement money into the markets)

http://www.csmonitor.com/2005/0426/p09s02-coop.html

PROVIDENCE, R.I. – Are Americans smart enough to manage their own retirement savings? No, as a matter of fact, they're not. Americans are amazingly dumb about investing.

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Richard Thaler has made a career of cataloguing the blunders of amateur investors. A University of Chicago economist, Mr. Thaler ticks off the mistakes: People tend to be overconfident in their ability to pick stocks. They're unwilling to admit a mistake and make matters worse by holding on to losers. They put more money in the market as it nears its peak. When a market is rising, they think it will keep rising.

The federal government has been a model for giving workers control over their retirement accounts. Too bad federal employees haven't been model investors.


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Americans may be dumb about investing. That doesn't mean they are dumb. They've just never worked at it. I'm smart enough to fly a Boeing 747, but I don't know how.

No one would ever put me behind the controls of a jumbo jet, but I can buy a stock as easily as Warren Buffett. Adding danger are the flattering words of brokers and politicians pushing private Social Security accounts. They tell us we have what it takes. History would disagree.

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