Notice: the following is my own musing and not necessarily the view of GHC Capital Markets Limited.
Reflecting an exchange on LinkedIn yesterday (really enjoyed the debate Noel Watson CFP® and others), realising we live in a world 🌎 of #statistics, you can find numbers in #support of just about any idea. The problem arises when you find statistics that support every way of viewing an idea.
For example:
You can find statistics that say you should cut down on the consumption of dairy products and others that dairy products are good for you.
There are, of course, problems with using statistics as evidence. Let me remind you of a famous saying (Bejamin Disraeli):
“There are three ways to not tell the truth: lies, damned lies, and statistics."
What you must do is ask yourself some questions: who did the study that came up with the statistics, what exactly are the statistics measuring, who was asked, how were they asked, and compared with what?
If one believes in the truth of statistics (and there are many such), then how does one explain that the same political candidate can be 20 points ahead and 5 points behind his opponent in the polls at the same time? After all, both polls are "statistics".
Conclusion, every point of view uses statistics to support their ideas. It's your job to examine all statistics supporting all points of view, to arrive at your own conclusions based on all of them.
If you can't arrive at a conclusion, do your own study!
The #financialservices industry is required to signpost risk clearly. The Bottom Line for investors is that it is essential that #investmentrisk warnings be clear and sufficient not only to provide legal protection, but also to ensure that the message truly gets home.
Firms and advisors should only sell products (and services?) with a warning that conveys the real level of risk clearly. Unfortunately, what should be done and what is common practice are two different things.
As an #investor, the overriding factor that is crucial to know, is how much of your money you could lose and what circumstances could cause this to occur and remember, if you are uncomfortable with the risks of the #investment, or don’t understand what you are #investing in, there are always #lowerrisk #alternatives (although that in itself can raise a different risk - with the best example being the erosion of the #valueofmoney/cash by #inflation).
Thankfully, these days, there is a plethora of ways to do the same thing - so in reality, the onus of responsibility falls on the investor to do their homework and decide how best it is to access the service and products on offer.
Ultimately, this is what #regulation and #consumerduty should all be about - if they want it statistically it is imperative to understand the formula. I would say in response: “The world isn't binary Everything isn't yes or no. Sometimes…it's a dial…..it turns without your permission or approval" (Riley)
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#compliance #protection #risk