{"id":22749,"date":"2007-05-31T09:47:00","date_gmt":"2007-05-31T09:47:00","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=603"},"modified":"2007-05-31T09:47:00","modified_gmt":"2007-05-31T09:47:00","slug":"diferencias-psicologicas-entre-el-pequeno-medio-y-gran-inversor","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/diferencias-psicologicas-entre-el-pequeno-medio-y-gran-inversor\/","title":{"rendered":"Psychological differences between small, medium and large investors."},"content":{"rendered":"
\"\"<\/a>Let me start by saying that we are going to analyse certain behaviours and opinions that we have observed through our own experiences with clients and acquaintances. The reader need not necessarily identify with any of these profiles or ways of thinking. We are simply offering some reflections which, from our perspective, we find very revealing.<\/div>\n
As our regular followers will already know, for the past few months we have been dedicating a section of our multi<\/span> family<\/span> office<\/span> to apply our operating protocols to those with medium and even low levels of capital. Well, amongst this sector \u2013 which makes up the vast majority of the population \u2013 we have encountered a number of surprises regarding their understanding of risk and investment for their assets, compared to those with substantial fortunes. For years, we have become accustomed to the feedback<\/span> The insights that high-net-worth clients provide us with regarding their views on the economy, investments and money in general, and comparisons with small and medium-sized investors, have highlighted some very significant differences in perspective. Here are some of them:
Major investors<\/span> For the most part, they are open to exploring innovative options and financial creativity. Perhaps their interest in keeping up with the latest investment trends is what makes them so keen to analyse any new proposals for investing their assets. That said, they will do so meticulously: they will weigh up their options, seek advice and will scan<\/span> They will, of course, examine these options in great detail until they finally make a decision. Those with a more adventurous profile will take greater risks, whilst those with an ultra-conservative profile will almost always turn down the proposal; but, in general, they will never rule out an investment option before analysing it.
But let us analyse our recent experience with investors with lower net worth: Firstly, we can highlight that both small and average investors tend to be more resigned to low returns and high tax systems<\/span>. In other words, they generally rule out proposals that could optimise these two variables, essentially for two reasons: Retail investors<\/span> because no one has ever taken them into account, preventing them from using the tools that are normally only available to those with greater capital. That is why such proposals, tailored to their profile, surprise and confuse them, and they do not feel capable of completing the necessary procedures to benefit from them. They tend to settle for the simplicity of investing in the stock market as the only alternative to the financial marginalisation of their modest assets. They can make these investments by tr<\/span>\"\"<\/a>av\u00e9s<\/span> from any manager at their own bank or broker<\/span> from a financial institution, including via the internet<\/span>, just like someone who opens a fixed-term deposit at their local bank branch or places a bet on bwin<\/span>.com<\/span><\/a>, to give just one example. On the other hand, the reason why average investors<\/span> tend towards such conformity; perhaps this is based more on the habit of paying progressively higher taxes during the years of economic growth and maturity. Of course, another key factor is the widespread lack of awareness and interest in financial options designed for high-net-worth clients, yet which are largely applicable to the rest of the lower-income client base.
Often, the more assets one has, the less risk one should be prepared to take. And here we always come up against the same misconception: \u00abAfter-tax fixed-income returns are barely above the CPI<\/span>\u00ab<\/span>. This distorted view of fixed-income investments leads them to take risks across the board.
Large investors are already familiar with ways of investing in fixed-income securities that offer very attractive levels of return and growth, whilst exempt from tax<\/span> efficiently manage their assets in a wide variety of ways. They therefore have a very clear understanding of the difference between risk and security in their assets. But small and medium-sized investors continue to resign themselves to what they believe is the only profitable alternative to property investment, even though it is dangerously volatile \u2013 namely, the stock markets themselves or, in some cases, derivatives of these.
As we have explained on other occasions, there are safe alternatives<\/a> for all types of customer. For this reason, it is very important that, above all, the medium-sized investors <\/span>(and, of course, the big ones)<\/span> understand that they should not risk the bulk of their wealth on equities in order to grow it. The risk no<\/span> This must be taken as a given in any investment. Obviously, there is always a minimal risk that our entire economic system could go down the drain if a war or a sudden global crisis were to strike, and in such a scenario, not even fixed-income investments would likely survive, and of course no one would pay for our properties either. But barring such a situation, our investments must be safeguarded, and we must make a very clear distinction between assets that can be exposed to risk and those that cannot.
As we were saying, this confusion has led many investors to surprise us with comments such as: \u00abMy fixed income comes from property rentals and the steady rise in property values. I therefore need to invest my cash in the stock market to achieve a good return.\u00bb<\/span>. Come on! Rents aren\u2019t fixed, and property values don\u2019t go up in<\/span> eternum<\/span><\/span>, I can assure you of that. \"\"<\/a>Naturally, as these average investors begin to appreciate the appeal of high-security, high-yield fixed-income investments, their thinking becomes clearer and they start to take fewer risks. But I must admit that we find it much harder to persuade them to offload their property holdings in favour of cash, because they continue to place their trust blindly<\/span> \u2026that their properties will be worth more and more and more and more every day\u2026 What a short memory. And I\u2019ll never tire of repeating it: These are times for cash.
I must also say that for very small portfolios \u2013 and particularly when the owners are young \u2013 investments in equities are not only advisable but, I would even go so far as to say, essential. Growing your wealth at a rate of 8% in fixed-income investments with just a few thousand euros and your whole life ahead of you is little short of a death sentence. Whereas for someone of middle age with hundreds of thousands of euros, growing at that rate becomes almost a necessity. And in all the cases mentioned, another variable must be taken into account: the ability to generate savings from our employment, but we\u2019ll discuss that in another post.
To sum up, what strikes me as significant is the widespread underestimation of the risks associated with equity markets amongst average investors, and the tendency to treat property investment as if it were a fixed-income investment. We\u2019re not on the right track.<\/div>","protected":false},"excerpt":{"rendered":"

Vaya por delante que vamos a analizar algunos comportamientos y opiniones que hemos contrastado desde nuestras propias experiencias con clientes y conocidos. El lector no tiene porqu\u00e9 sentirse identificado con ninguno de estos perfiles ni maneras de pensar. Simplemente hacemos unas reflexiones que, desde nuestra perspectiva, nos resultan muy reveladoras. Como ya sabr\u00e1n nuestros seguidores […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-22749","post","type-post","status-publish","format-standard","hentry","category-sin-categorizar"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=22749"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22749\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=22749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=22749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=22749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}