Joe Nocera, an editor of Fortune and prolific financial journalist, once wrote about why he continues to use a full service stockbroker. Joe says he needs a connection to someone in the financial services industry. He wants to share ideas with someone who will tell him things he'd prefer not to hear. This de facto partnership helps to avert one of the greatest impediments to informed decision-making. Our human tendency is to make decisions based upon emotional feelings and then pick whatever rationale we need to support what we feel like doing.
Intelligent people can make educated guesses, but in the end, nobody really knows for sure.
Brilliant hedge fund managers like George Soros have closed their doors after some bad bets. This column has talked about other respected financial leaders, like Alan Greenspan, who effectively admit that they don't have the answers. It's like raising teenagers. In the end, our only choice is to sit and grip the arms of our chair as tightly as we can. Some aspects of financial decision-making are indisputable.