Investment Return: Arithmetic vs Geometric

I’m pretty sure that most of you are interested in investing money.

Have you choose the investment portofolio that could give you the highest return on investment given your risk tolerance? I hope so.

Did you choose your portofolio yourself or are you following another peoples (experts) suggestion?

If you choose the latter answer you should check the return they advertised compared to the return you got.

Why?

Pretty sure that they compute the average monthly return or average annual return based on arithmetic means.

Productivity vs unemployment

Story:

An engineer who while visiting china came accross a large crew of men building a dam with picks and shovels. When the engineer pointed out to the supervisor that the job could be completed in a few days, rather than many months, if men were given motorize equipment, ex: backhoe, the supervisor said that such equipment would destroy their jobs. The engineer responded “Oh, I thought you were interested in building a dam. If its more jobs you want, why dont you have your men use spoons instead of shovels.