I've always been amazed how the larger investment firms get away with blatantly anti-consumer behavior. Obviously they have deep pockets to lobby Congress in addition to advertising heavily during Sunday's televised golf match. I know some very good investment brokers, but I have no idea why they choose to stay in that culture. This video has a funny spin on highlighting the differences between fiduciary advice and advice that is not necessarily in the client's best interest but deemed 'suitable.' It's worth a 5-minute break in your day.
After reading the title of this post, my hope is that a look of disbelief is cast on your face. Of course butter production in Bangladesh has nothing to do with prediction of US stock market returns. However, through data mining all sorts of 'relationships' can be demonstrated. Many mutual funds, ETFs, and trading strategies are built upon these data mining strategies--most often to the harm of investors that utilize them. As Jason Zweig describes in a recent article in the Wall Street Journal, entitled Data Mining Isn't a Good Bet For Stock-Market Predictions , "The stock market generates such vast quantities of information that, if you plow through enough of it for long enough, you can always find some relationship that appears to generate spectacular returns -- by coincidence alone . This sham is known as data mining." I recall in from my business statistics course in grad school, how I was able to show that ice cream consumption was correlated to the murder ra