The world of investing does not work today for the public. It is a world so complex and dysfunctional that individual investors are forced to entrust their financial futures to financial advisors, who are also sales people, for both education and guidance. Then they simply buy the investments that are recommended to them without question. Nowhere have average people with money to invest been trained to analyze the advice given to them. As a result, far too often people end up owning portfolios with mediocre returns, high risk and excessive expenses. In today's world of investing virtually all of the power rests with the financial services industry while the individual investor has none. This needs to change. The power of investing must shift from financial experts to the people. The NAOI was created to make this happen.
The Mission the NAOI - Investor Empowerment
The mission of the NAOI addresses two audiences as follows:
1. Individual Investors. Our mission here is to empower individuals to become more confident and effective investors in order to take full advantage of the wealth creation power of US equity markets. To accomplish this mission the NAOI takes two approaches. First we will create and provide the education needed to make individuals smarter and more effective investors. Second we will research and develop new investing methods and investment types that make investing simpler. By combining investor education with investing innovation the NAOI is dedicated to enabling individuals to decrease their dependence on investing "experts," and take more personal control of their financial futures and earn higher returns with less risk.
2. Financial Advisors and Organizations. Our mission here is to give to the financial services industry updated investing methods and investment types that will meet the wants and needs of the new breed of individual investor that will be created by NAOI education and training. We are meeting this goal through our Research and Development division. Our most recent release was Dynamic Investment Theory - a viable alternative to Modern Portfolio Theory that works far better in modern markets. It creates a new investment type called Dynamic Investments that have the built-in intelligence to automatically change the investments they hold based on a periodic sampling of market trends. You can read about them here.
This mission statement is aimed at improving how investing works today for BOTH individual investors and for financial professionals and organizations that exist to serve them.
The Components of Investor Empowerment
To meet the goals of our Mission Statement the NAOI develops resources in the following areas:
- Education - The first element of investor empowerment is education. Today serious investor education is virtually non-existent. The world of investing is so chaotic and filled with subjective human judgment that it is virtually unteachable. This is one reason why academia has shied away from presenting courses in this important life-skill. The NAOI is dedicated to creating comprehensive, objective and academically rigorous investor education that teach individuals to invest with confidence. They can then use this knowledge to invest on their own if they wish. Or they can use it to effectively analyze and question investment recommendations given to them by an advisor. In either case, individuals who study NAOI investor education material will no longer be forced to simply trust salespeople to protect and grow their wealth. Refer to the Education area of this site for more information.
- Research and Innovation - Education is not empowering if it teaches outdated investing methods. In today's investing world the industry standard for portfolio design is Modern Portfolio Theory (MPT). This is a theory that advocates risk reduction via asset allocation and a buy-and-hold management strategy. MPT was introduced to the market in 1952 when markets were a far different place. While markets have evolved dramatically since then, MPT has not and in the opinion of the NAOI it no longer works. MPT needs to be replaced and the NAOI does so with Dynamic Investment Theory (DIT) that you can read about on this site. Thus, the second major component of investor empowerment is the development of innovative portfolio design and investment methods that work in today's markets. Refer to the Research area of this site for more information on the NAOI's R&D activities.
- Support Resources - The third element of investor empowerment is the development of a wide spectrum of resources that support an individual's investing activities. Such resources will consist of NAOI Recommended Investing Web Sites, Investment Planning Calculators, Advisor Evaluation Checklists, Investment Analysis Checklists along with Investor Self-Analysis tools that will help individuals define their financial status and profile. The NAOI is dedicating significant time and effort to both identifying and creating these resources that we will then include in our education material.
Each of these components is essential to enabling individuals to invest with confidence. Taken together they accomplish our goal of shifting the power of investing to the people, where it belongs.
Working with the Financial Services Industry
The NAOI is equally committed to working with the financial services industry to empower people to become confident investors. As a result of working with thousands of individual investors who have taken NAOI education courses and/or read our books, we know that millions of individuals are not currently invested in the market. Why? Because they are unwilling to risk their financial futures on an industry that they don't understand and people who they don't trust. By working with the NAOI financial organizations will be able offer the to the market the empowerment components that will bring these people back into the market and increase the activity of the clients they currently have. Refer to the Consulting Services area of the site.
Shifting power from the financial industry to the people, if done correctly, will be just as beneficial to financial organizations as it will be to the investing public. The NAOI has developed the programs needed to show the financial industry how to take advantage of the changes that are coming to the world of investing. Refer to the Future of Investing area of this site for more information on what these changes will look like.
Change Is Not Optional
The world of investing as it exists today cannot be sustained. It is a world in which all of the power is held by the financial vendors and none is held by the buyers. It is a world in which financial services firms make all of the money while the individual investor takes all the risk. The public recognizes this disparity and is growing increasingly dissatisfied and even angry. Yet they can do little about it in the absence of a dramatically new way to invest, one that transfers power to them. The mission of the NAOI is to provide individual investors with new investing methods, education, tools and resources that individuals need to become confident investors. When this happens the world of investing changes at its very core. You will read about how on this site.