In his book – The Laws of Wealth: Psychology and the Secret to Investing Success, Daniel Crosby explains why the road to poor returns is paved with complexity. Here’s an excerpt from the book:
There are a number of reasons – some nefarious, others not – why Wall Street tends to complicate the process of financial planning and investing.
Wall Street’s “fetish for complexity”, as Dr Brian Portnoy refers to it, is a mix of justifying fees, trying to make sense of a complicated system and falling prey to the mistaken notion that convolution equals sophistication.
As H.L. Mencken quipped, “What ails the truth is that it is mainly uncomfortable, and often dull. The human mind seeks something more amusing, and more caressing.”
Whatever the impetus, the road to poor returns is paved with complexity just as surely as the road to Hell is paved with good intentions. Motivations aside, complexity kills.
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple: