Posted in Finance, Accounting and Economics Terms, Total Reads: 365
Definition: Barefoot Pilgrim
This term was originally used to refer to unsophisticated car buyers who used to buy the car at advertised sticker price, thus paying too high due to lack of sophistication and knowledge.
In later times it came to be used by the Wall Street professional as well. It became a colloquial term for someone who has not done his proper due-diligence and invested heavily in stock markets and lost everything until his last dime. “Barefoot” actually refers to losing even one’s shoes. It refers to someone who has taken unnatural amount of risk without proper research or taking an expert’s opinion and invested carelessly. The person is said to display complete financial ignorance and naivety.
Hence when an investor is looking to invest in such huge amounts, one must be careful and invest according to their risk appetite. Hence one has to consider the Geographies where they are investing, asset classes, sector exposures etc. For example, for a low risk investor it may not be useful to invest in Emerging markets that are considered to be more risky or it may not be fruitful to invest in highly volatile asset class like Real Estate and instead should move his allocation to safe havens like G-Secs/Treasuries.