How Can Every Single Person Make a Successful Investment?

A well-known travelers tip is to check out where the locals hang out and eat, and eat there to avoid tourist traps.

Another example (before the invention of Waze) is our ability, as locals, to utilize shortcuts and reduce the time we wait in traffic in our hometown.

This phenomenon was researched by two Nobel prize winners – Kenneth Arrow and George Akerlof who coined the term Information Asymmetry.

The Asymmetrical Information is created when different parties have a different amount or different quality of information, because on side (usually the seller) has certain information that the other side (usually the buyer) does not possess.

When taking it to an investment standpoint, we can understand that as locals we have more information about projects being planned in the city, or an abandoned apartment in our area that can hold financial potential.

We also possess an advantage in the local stock market as opposed to foreign investors because of our familiarity with local and national companies and businesses.

For additional reading I recommend searching the following Local Bias articles:

Local Does as Local Is: Information Content of the Geography of Individual Investors’ Common Stock Investments, ZORAN IVKOVIC and SCOTT WEISBENNE