I invite you to be aware of your senses while you proceed towards a selection of investments.
For example you get a recommendation to buy equities among the sector luxury goods because
- the trend is good
- the stocks are not overpriced
- the strong demand in emerging markets is intact
- marketing campaign tells that you couldn’t live without it
and so on.
Your brain agrees with these arguments and if your stomach feels bad, your inner-voice says “are you sure”, you remember pictures of TV-news showing ignoble working conditions for miners, then just leave it. You are free upon your active decisions.
On the other side you cannot influence your pension investments. It is good to know that institutional investors stick close to their benchmark. Among an index all sectors are represented.
So in fact you can make the difference only with the money you manage directly. I think this is good to know. Today you can find mutual funds which select each single position with responsible criteria. Still it is very difficult to have it all consequent.
