{"id":107096,"date":"2020-11-07T12:59:54","date_gmt":"2020-11-07T09:59:54","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-no-1-difference-between-millionaire-investors-and-everyone-else\/"},"modified":"2020-11-07T12:59:54","modified_gmt":"2020-11-07T09:59:54","slug":"the-no-1-difference-between-millionaire-investors-and-everyone-else","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-no-1-difference-between-millionaire-investors-and-everyone-else\/","title":{"rendered":"#\n  The No. 1 difference between millionaire investors and everyone else"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3584988e9f8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3584988e9f8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-no-1-difference-between-millionaire-investors-and-everyone-else\/#Researchers_asked_high-net_worth_investors_what_goes_through_their_mind_when_they_think_about_equity_exposure\" >Researchers asked high-net worth investors what goes through their mind when they think about equity exposure<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-no-1-difference-between-millionaire-investors-and-everyone-else\/#The_advice_gap\" >The advice gap<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/the-no-1-difference-between-millionaire-investors-and-everyone-else\/#Andrew_Keshner\" >Andrew Keshner<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  The No. 1 difference between millionaire investors and everyone else<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Researchers_asked_high-net_worth_investors_what_goes_through_their_mind_when_they_think_about_equity_exposure\"><\/span>\n  Researchers asked high-net worth investors what goes through their mind when they think about equity exposure<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"C53F6E2E-124B-11EB-AB11-FED317BA347A\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Chalk this up to another way the rich are different from you and me.<\/p>\n<p> When wealthy people think about how much of their investment portfolio should be in equities, the most-cited factor influencing their decision is advice from their financial adviser.<\/p>\n<p>When investors from all rungs of the income ladder make decisions about equity exposure, they\u2019re most likely to be thinking about their risk of illness and injury expenses.<\/p>\n<div class=\"paywall\">\n       That\u2019s according to a recent study on what\u2019s going through the minds of investors with portfolios worth at least $1 million.<\/p>\n<p>The researchers at Yale School of Management and the University of Toronto started with questions to almost 2,500 high-net worth investors. <\/p>\n<p>Then professor James Choi at Yale and professor Adriana Robertson at the University of Toronto compared those replies with their<a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/spinup-000d1a-wp-offload-media.s3.amazonaws.com\/faculty\/wp-content\/uploads\/sites\/27\/2019\/09\/Horses-mouth-2019.09.29.pdf\" class=\"icon none\"> previous research<\/a> into the equity investing attitudes of a nationally representative survey with <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roximately 1,000 people at all income levels. <\/p>\n<p>\u2022 In contrast to the importance that high-net-worth investors placed on input from financial advisers, a nationally representative sample of investors at all income levels put advice from a financial planner at No. 23 on the list of factors.<\/p>\n<p>\u2022 Among the employed members of the nationally representative sample, 47.5% said \u201cyears until retirement\u201d was a very or extremely important factor when deciding what portion of their portfolio was invested in equities. That made it the top most cited factor for employed people within the representative sample. <\/p>\n<p>\u2022 The investing time horizon before retirement was the second-most cited factor of importance for wealthy, employed investors. Almost 26% of wealthy, working investors said their years until retirement were very or extremely important in the equity allocation decisions.  <\/p>\n<p>\u2022 Though risk of illness was the topmost cited factor for all investors in the everyday sample, it was the sixth-most cited factor for wealthy investors (20%). <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>\u2022 A lack of knowledge about how to invest is the seventh-most cited factor in the representative sample (36%) and it ranks 21st among the well-off, coming in at nearly 11%.<\/p>\n<p>To be sure, affluent and everyday investors are fueled by a number of the same concerns, the research shows. That includes years until retirement, risk of illness and injury expenses and the need for cash on hand.<\/p>\n<p>The risk of rare stock market disasters also weighed on the minds of both groups. It\u2019s the fourth-most cited factor for the representative sample and fifth for the wealthy sample. (Researchers fielded both surveys years before the coronavirus pandemic\u2019s economic fallout but years after the Great Recession.) <\/p>\n<p><strong>Don\u2019t miss:<\/strong>Opinion: Many stock investors are too young to remember Black Monday in October 1987 \u2014 why that\u2019s a problem<\/p>\n<p>Likewise, both groups put little weight in factors like investing tips from non-professionals or \u201crules of thumb,\u201d like investing a percent in stocks that\u2019s based on 100, minus one\u2019s age. <\/p>\n<p>But the research is still a stark reminder that people see the same stock market differently \u2014 especially at a time of great volatility and more retail investors trying their hand. It also underscores how health expenses loom large for many Americans and play into other financial decisions. <\/p>\n<div data-layout=\"inline\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetPullQuote\n          inline\n  article__inset\n        article__inset--type-InsetPullQuote\n          article__inset--inline\n  \"><\/p>\n<div class=\"wsj-article-pullquote article__inset__pullquote \">\n<p class=\"pullquote-content article__inset__pullquote__quote\">\n        <span class=\"l-qt article__inset__pullquote__mark--left\">\u201c<\/span><br \/>\n        \u2018There are areas of commonality,\u2019 but wealthier investors displayed \u2018a deeper level of comfort with the market and confidence in their ability to navigate the market.\u2019<br \/>\n        <span class=\"r-qt article__inset__pullquote__mark--right\">\u201d<\/span><\/p>\n<p>        <small><br \/>\n          <span class=\"inset-author article__inset__pullquote__author\">\u2014 James Choi, professor of finance at the Yale School of Management<\/span><br \/>\n        <\/small><\/p><\/div>\n<\/p><\/div>\n<p>       \u201cThere are areas of commonality,\u201d Choi, one of the authors, told MarketWatch. But wealthier investors displayed \u201ca deeper level of comfort with the market and confidence in their ability to navigate the market.\u201d In the nationally representative sample, \u201cyou see a lot of discomfort with the market.\u201d <\/p>\n<p> Choi cautioned against reading too much into the wide percentage ranges between the wealthy survey sample and the nationally representative one. \u201cIt could just be the wealthy using a different scale internally,\u201d he noted. <\/p>\n<p>Around 55% of Americans own stock, according to <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/news.gallup.com\/poll\/266807\/percentage-americans-owns-stock.aspx#:~:text=Thus%20far%20in%202020%2C%20Gallup,Gallup%20has%20measured%20since%202010.\" class=\"icon none\">Gallup data <\/a>from earlier this year. That\u2019s essentially unchanged in the past 10 years, but it\u2019s below the 62% mark in the early- and mid-2000s, the data shows. Richer poll participants were more likely to own stock, the poll shows. Eighty-four percent of people making at least $100,000 said they owned stock.<\/p>\n<p>The new study asked about stock ownership in broad terms, which could cover investments including a 401(k) account, a brokerage account, individual stock ownership and more, Choi noted.<\/p>\n<p>In one interesting twist, wealthy investors on the whole said \u201chigh-momentum\u201d stocks provided lower  expected returns than \u201clow-momentum stocks.\u201d But researchers noted more people in the representative sample saw it the other way around. <\/p>\n<p>Momentum relates to the rate of change in a price.  Historically, high momentum stocks had high average returns, the study noted. <\/p>\n<h6><span class=\"ez-toc-section\" id=\"The_advice_gap\"><\/span>The advice gap<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Around two-thirds of the wealthy survey participants had a professional adviser of some sort, according to the new research. But other data suggests many people go without professional advice. <\/p>\n<p>Three quarters of people told <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2019\/04\/01\/when-it-comes-to-their-financial-future-most-americans-are-winging-it.html\" class=\"icon none\">a CNBC and Acorns Invest in You Savings Survey <\/a>last year that they managed their own finances. <\/p>\n<p><strong>See also:<\/strong> \u2018Smart money\u2019 just reversed bets against tech stocks in a huge way<\/p>\n<p>One reason could be the cost of professional advice. Many advisers work on a percentage basis, charging 0.25% to 1% of a client\u2019s account, according to the personal finance website <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/blog\/investing\/how-much-does-a-financial-advisor-cost\/\" class=\"icon none\">NerdWallet.<\/a> Other advisers can charge a flat fee that ranges from $2,500 to $7,000 a year. <\/p>\n<p>\u201cFinancial advice is expensive,\u201d Choi said. \u201cFor somebody with a small amount of assets, it can often not be very economical to get that advice professionally. Whereas with wealthy investors, there\u2019s a lot of dollars to spread usefulness of that advice.\u201d <\/p>\n<p>Some financial advisors weren\u2019t surprised by the divide between the two investing groups. <\/p>\n<div data-layout=\"inline\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetPullQuote\n          inline\n  article__inset\n        article__inset--type-InsetPullQuote\n          article__inset--inline\n  \"><\/p>\n<div class=\"wsj-article-pullquote article__inset__pullquote \">\n<p class=\"pullquote-content article__inset__pullquote__quote\">\n        <span class=\"l-qt article__inset__pullquote__mark--left\">\u201c<\/span><br \/>\n        \u2018We are a field that has had an image problem \u2014 we present ourselves as a solution for wealthy families and individuals, and that perception lingers.\u2019<br \/>\n        <span class=\"r-qt article__inset__pullquote__mark--right\">\u201d<\/span><\/p>\n<p>        <small><br \/>\n          <span class=\"inset-author article__inset__pullquote__author\">\u2014 Karen Van Voorhis, director of financial planning at Daniel J. Galli &amp; Associates<\/span><br \/>\n        <\/small><\/p><\/div>\n<\/p><\/div>\n<p>       \u201cThe discrepancy is surely based on the perception that financial planning is meant for people who have wealth. We are a field that has had an image problem \u2014 we present ourselves as a solution for wealthy families and individuals, and that perception lingers,\u201d said Karen Van Voorhis, director of financial planning at Daniel J. Galli &amp; Associates in Norwell, Mass. <\/p>\n<p> \u201cJust saying \u2018I work for a wealth management firm\u2019 creates an impression that a firm is for only certain people,\u201d she added.  The field has become more accessible, according to Van Voorhis. \u201cBut \u2018regular people\u2019 still don\u2019t think that professional financial advice is for them \u2014 we have more work to do on this.\u201d <\/p>\n<p>Meanwhile, Michael Simmons\u2019 best clients in more than two decades of offering financial advice \u201care those who are willing to take advice. <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a>ly speaking, anyone willing to pay for advice usually is also keen on following it,\u201d said Simmons, a member and director of financial planning at Transitions Wealth Management in Denver, Colorado. <\/p>\n<p>The rise of discount brokerage accounts, with their reduced fees and commissions, has been a boon for the investing public, he said. <\/p>\n<p>\u201cUnfortunately, it\u2019s also created the illusion that paying for financial planning or advice is neither needed nor in an investor\u2019s best interest as it can be seen from the lens of the average investor as an expense without value,\u201d Simmons said.<\/p>\n<div data-layout=\"inline\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetRelatedArticles\n          inline\n  article__inset\n        article__inset--type-InsetRelatedArticles\n          article__inset--inline\n  \"><\/p><\/div>\n<div data-layout=\"\n              inline\" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetCommentingPromo\n            \n            inline\n  article__inset\n        article__inset--type-InsetCommentingPromo\n            article__inset--inline\n  \"><\/p><\/div>\n<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Andrew Keshner\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Andrew_Keshner\"><\/span>Andrew Keshner<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener noreferrer\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7BC53F6E2E-124B-11EB-AB11-FED317BA347A%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# The No. 1 difference between millionaire investors and everyone else &#8221; Researchers asked high-net worth investors what goes through their mind when they think about equity exposure Chalk this up to another way the rich are different from you and me. When wealthy people think about how much of their investment portfolio should be&#8230;<\/p>\n","protected":false},"author":1,"featured_media":107097,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-107096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/107096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=107096"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/107096\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/107097"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=107096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=107096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=107096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}