FAQ  #7. Do I have to understand all these quantitative stuff, … maths and statistics, to be a successful investor?

Not necessarily, … but if it is just old phobias and bad memories, it’s probably worthwhile to take some effort to catch at least the essence of the most widely used concepts and terminology. You don’t have to master them, unless you want to save all the costs of using professional helpers (which in this case would probably mean throwing out the baby with the bathing water), but to be able to meaningfully communicate with your advisors, and avoid being awfully dependent on them, you should develop some basic literacy in these fields.

Developing trust between collaborators in any situation is important, including the advisor-client relationship. However, if it’s merely trust, without mutual understanding and meaningful communication, that glues them, then the risk for the relationship souring is too high, … because either real or imagined taking advantage of the client will very easily crop up, without clear and easy ways of clarifying the situation. Therefore, to me, improving this understanding is very important. It can be one of the keys to avoid unrealistic or false expectations as well. Yes, it takes some time and effort, but I can’t really see any way around it.

Instead of running from the challenge, I recommend embracing it. Request and demand clear explanations, lots of examples and illustrations, and play and experiment with the many quantitative tools freely available on the internet, or perhaps in a spreadsheet program on your computer as well. You can lose your aversion and develop even some liking of these things if you see for yourself how meaningful they are: statistics, calculations, probabilities, etc.

…. Work in progress, … please come back soon