How Do the Wealthy Invest? – Of Dollars And Data
An overview of how the rich invest their money and what we can learn from them.

They hire financial managers to think about all this

Largely true, but I think that makes the discussion all the more interesting. A lot of people act like the way the wealthy invest is what made them wealthy, but the data generally shows that is not true, and that the alternatives they invest in often don’t generate any additional risk adjusted return. If that’s true, and the decision is being made by financial professionals who should know that… then why do we see the investment patterns that we do becomes a fun rabbit hole.

they invest in often don’t generate any additional risk adjusted return.

When you worth more than $1 mil, you’ll be persistently advised invest in S&P and gov bonds for 95% of your portfolio. And it’s probably the main job of investment managers – to convince their clients that YOLO/BTC-to-the-moon is not a sustainable investment strategy.

For the 10% of more sophisticated clients, investment managers fall into information asymmetry dilemma. Hedge funds tell very little to their client about fund’s investment strategy and they often lose money nonetheless.

TLDR: even if you’re rich, the market will eat you up, don’t let that happen

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