Source: Howard Lindzon

What is the value of experience in a world in flux? Mark Rzepcyznski at DSGMV writes:

“Most people believe that more experience is better than less experience. Hire the older portfolio manager or trader and you will do better. This has strong logic and makes sense; however, experience can be harmful if you learn the wrong lessons, or the lessons of the past do not apply to the future.”

This isn’t the first time the world has seemed weird. But do the lessons of the past no longer explain the current environment?

The nature of the stock market, at least in the U.S., has changed. The largest companies are increasingly dominating by whatever measure you choose.

Young professionals are voting with their feet. The number of people sitting for the CFA exam is in free fall, while the number sitting for the CFP exam is on the rise.

The crypto markets, which barely existed a decade ago, continue to gain mind share among investors, especially younger investors. They are supported by an industry that has helped fund a Presidential campaign. It’s not hard to imagine how crypto accidents could impact the broader financial system.

There was a time when an ETF meant one thing: a low-cost, broad-based index fund. Now the term can mean pretty much anything. ETF innovation has net-net, been a good thing, but the burden on investors is increasing as they need to sort the sensible from the dangerous.

If everything is up for grabs, per Howard Lindzon, then expect more hands to try to get into your pocket. It may be through the flywheel that is the degenerate economy, or it may be the private equity industry that wants to shoehorn their funds into your 401(k) account.

The challenge for investors is to hold two seemingly contradictory ideas in their heads at the same time. The first is that there has never been a better time to be an investor. Access is increasing, while costs keep falling. The second idea is that there are now more, novel, ways to blow up your financial life. And the number only keeps growing.

That doesn’t mean you can simply put your head into the sand. Just as there are risks, there are also a greater financial opportunity set. Also, knowing what you are saying no to, helps when it comes to keeping you resolute in the face of an onslaught of hype and hope.

Experience is a double-edged sword. It’s hard to unlearn the lessons of the past, especially in an accelerating world. One lesson you should never forget is that no one cares more about your money than you do. So do yourself a favor and keep learning. Because when everything is up for grabs, the risks are higher than ever.