Investors in today's stock market face the challenge of filtering out the need-to-know news from the reams of financial noise. Charismatic investment guru Alvin Hall says that the investment industry should help educate the public, and set first-time investors on the right path to a comfortable retirement.
He talks to Emma Wall at the London Investor Show.
Alvin Hall: I think the biggest challenge facing private investors is the broad number of products in the market and understanding which ones are useful to them. Everybody looks to shares, but then you have different kinds of shares, different kinds of fixed income securities; you have OEICs, you have ETFs, you have unit trusts, that’s a lot of products. People need to decide to focus and learn about just one product well and do it on an as-needed basis.
The number one driver of the people investing today is to build capital for their retirement. Everyone I’ve spoken to has told me about losing money in the recent market downturn and now they’re trying to recapture that money to build themselves a better retirement. Everybody is looking for security.
I think the investment industry has to do a better job of educating the public about various products. Some of these products are rather esoteric, and although they may seem applicable to everybody, the first question they need to ask the investor is “how much risk are you willing to take?” Then once they understand risk, they should advise the investor in a manner appropriate to their risk tolerance.