Quora Answer: Since There are Many Sites & Books about Investing, How Can I Know if They are Good?

The following is my answer to a Quora question: “There are a lot of sites and books about investing.  How can I know if they are good or they are a scam?”

A good book or site about investing has a clear explanation of the definitions of the terms and practices.  It references compliance and ethical rules set down by law so that we know the limits of what we can do.  There is also a clear explanation of various strategies depending on the different investment horizons, and risk profile of the different types of investors.  That makes it technically sound.  However, it takes an exceptional writer to be able to take such a dry subject matter and make it understandable, subscribable and marginally interesting.  Nobody wants to be drowned in statistics and nomenclature.

On the other hand, there are books and sites that simplify things to oblivion, and that is not just unhelpful, but also dangerous.  These are books of fads, that overpromise, and lean heavily on testimonials.  What worth is the opinion or impression of someone as new to this to the reader?  The entire point of learning is to take knowledge from the people who have been in the field for years.  Temporary profit may be due to luck, but sustained performance tells us what really works.

Any person who guarantees capital protection, a certain level of profits and exceptional growth is a fraud.  When even the largest fund houses do not dare to do that, how is this person able to do so?  In this industry, people who have managed to find a means to guarantee, for example, 15% growth per quarter, is not going to put it in a book or web site.  He is likely a star trader at a fund house with a ridiculously high entry point for the fund he manages.  If he is that good, he makes more money using his method in a year than a lifetime of peddling this on some website or in some book.

If there is an expert on finance who is genuinely good, he will not be shilling for $5,000 workshops for beginners.  He will be giving a speech at an industry event with the top bankers and financial advisors, charging six-figure fees for that 40 minutes.