Buying shares at random you diversify your risks – this is the conclusion of scientists from Canada. At the University of British Columbia (Canada) conducted their research on the main mistakes of young investors. First, analysts from the university above selected a group of novice investors and asked them to choose from their list the companies that they would like to see in their portfolio of assets.
As a result, almost all young people made their choice in favor of the so-called "positively correlated assets". But the problem is that when buying shares of such companies, there is a very big risk that they will all rise or fall at the same time.
One of the authors of this study, namely Mr. David Hardisty, states in it the following: "We watched very well how these young investors simply took and" bought "shares of mining and oil companies, as well as shares of companies from the banking sector. Moreover, these At the same time, young investors were sure that by doing so, they would diversify their assets, as if they were investments in different industries and companies, however, all the shares they bought had a tendency to move "in unison", which is likely to simply lead to their simultaneous to the fall. "
By the way, during the second stage of this experiment, the researchers asked them to "buy" shares of companies, but with the greatest risks. After that, many of these guys took and “pulled” shares at random, however, this is the way the choice of assets is recognized as the safest in the scientific community of the world, that is, when you make such purchases as if unconsciously.
According to another researcher, Yann Cornel: "This behavior of novice investors tells us that they rely on the definition of" risk ", but confuse it with the so-called" portfolio risk "and this is their main problem now."
That is, “risk” and “portfolio risk” are two big differences and the one who does not distinguish between them will simply and constantly make risky investments. Therefore, "wind on your mustache" this experience of Canadians!