Is IQ necessarily correlated with investing returns or not?
The relationship between IQ and yearly returns in the stock market is a subject of ongoing debate among investors.
low IQ loses 100%: they don't know any better choices
middle range IQ earns 10%: buy and hold $SPDR S&P 500 ETF Trust(SPY)$
high IQ loses 700%: incredibly sophisticated and intricate strategy that turns out to be stupid
Some argue that individuals with IQs in the middle range tend to fare well, with the capacity to make reasonable returns through relatively straightforward strategies like buying and holding an index fund such as $SPDR S&P 500 ETF Trust(SPY)$.
Conversely, individuals with exceptionally high IQs may struggle in the stock market. These investors might overcomplicate their strategies, leading to losses that can be substantial.
Those with lower IQs are seen as being particularly vulnerable to substantial losses because they may lack the knowledge to make informed decisions, potentially losing their entire investment capital.
Do you agree with this meme?
Do you think IQ and returns have certain relationship?
Which type of investors are you?
What kind of investment strategy do you use?
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🌟🌟🌟It would seem that high IQ may lead to better investing or is it? Warren Buffett disagrees. In fact he said an investor needs to be smart, not a genius. He places more emphasis on Rationality and Emotional Stability. Rationality is a sound intellectual framework for making decisions and the ability to keep emotions in check are important qualities to have in investing.
I prefer to have EQ or Emotional Intelligence which is the ability to understand, use and manage my emotions in positive ways so that I do not make irrational decisions when Fear pervades the markets. That way I can achieve my goal of FIRE - Financial Independence Retire Early. My motto is Slow and Steady Wins the Race. It is certainly not Fast and Furious. Investing is after all a Marathon not a Sprint!
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While too low or too high and IQ might not be optimal, we need to have good EQ, AQ and FQ. Emotional intelligence, more specifically stability and maturity. Adversity Intelligence to learn from the investing mistakes. And Financial Intelligence to choose the appropriate instrument for your wealth. What do you think? [Great] @Bonta @daz88888888 @LMSunshine @GoodLife99 @melson @SirBahamut
Hence, the most important quality is take charge of emotions and have a long term time horizon in investing. What kind of investor are you?
相反地，智商異常高的個人可能會在股市中苦苦掙扎。這些投資者可能過於複雜他們的策略，導致了巨大的損失。
在大多数情况下，最终是个人的金融知识和环境让人们获得投资方面的经验和知识，以获得有利的收益。
想象一下，一个低智商的人来自一个贫穷的经济背景，这个人会努力使收支平衡，更不用说投资了。如果投资，鉴于缺乏金融知识，这很可能是一种赌博。
然而，一个来自丰富背景的低智商个人可能知道的不多，但假设家庭背景精通投资，这个人可能仍然有机会做得很好，因为这个人正在接触这样的元素和教养。
因此，我个人认为这不是一个太大的争论话题，还有许多其他的话题会更有成效的讨论[Happy]
For sure IQ is needed to invest. But there are many factors beyond the control of the common man! And depends on investment horizon. In the short term, especially in the last 2 years, there are many 'fools'...[LOL]
Lower IQ are vulnerable to big losses and decisions many a time are gambles. Then again, one big win may cover all loses. If he or she is lucky, a 1000X gamble will propel him or her ahead of the higher IQ herd who are in a way limited by conventional wisdom.
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Therefore invest with discipline and rationality. One important rule, only invest and not gamble your money away.
Lower IQ are vulnerable to big losses and decisions many a time are gambles. Then again, one big win may cover all loses. If he or she is lucky, a 1000X gamble will propel him or her ahead of the higher IQ herd who are in a way limited by conventional wisdom.