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The "really long-term perspective" is actually the worst for individual stocks. All of the "hot" stocks of today will inevitably lose most of their current value in the long term. And they will never return to their historical highs. We know this will happen because this pattern has repeated throughout history.
That is where an index fund has the greatest advantage over individual stocks. They continue to go higher over the long term even after the worst market declines.
I guess my question would be what if you are buying individual stocks but they are not the hot stocks of today? After all, there is a whole universe of available stocks out there. I sold some stock last week and redeployed the proceeds into six new positions and I can pretty much guarantee that none of them are hot stocks.
My brother does not believe in Mutual Funds or ETF's. All of his investments are in individual stocks. He spends hours and hours and hours reviewing the stocks and doing all kinds of complex analysis before selecting a portfolio. 99% of his stocks are mid and small cap.
He kept telling me he could beat the professionals who devote their lives to picking stocks and have a team of people and computers to help them decide what stocks to buy and sell.
For years I asked him to give me his portfolio so I could compare it against the index fund of mid and small cap stocks. Finally, he gave it to me and I found out that the hundreds of hours of research was a waste of time because his great portfolio was 20% below the index of small and mid cap stocks based on the date he purchased his stocks and money invested.
I suspect that my brother is similar to lots of investors who prefer to pick their own stocks, instead of index funds or respected mutual fund managers.
He is probably outperforming the average investor in mutual funds if his performance is 80% that of an index of small and medium capitalization stocks.
If you buy and hold the companies of the products/services you use all the time you will probably do quite well. I bet many people use Apple products, and use Facebook, Google, Netflix and Amazon nearly everyday. If you bought and hold these you would be doing great. These would be offset recently by any retail store you owned that you may use alot, as these are massively underperforming, but stronger names like Walmart, Kroger, etc. will probably come back nicely over a 3-5 year period. Buy and hold what you know and use all the time and you will do well.
most of us drove gm cars , used kodak film, bought our daily goods from sears , rented movies from blockbuster and made xerox copies every day.
the problem with individual stocks is it involves not only knowing your own stocks well but you need to know what the competitors have on their drawing boards
To those who do better than the S&P 500 index year after year in your own stock picking, why don't you open a mutual fund? If you can do better than 90% of the mutual fund managers of mutual funds who don't beat the index, with all their expertise and resources, you are in the wrong line of work.
lol I don't think these people are actually beating the market. They are just not accurately accounting for their loses or their gains. There are index fund with 16% YTD ROI. lol I just don't think most people are beating that by picking stocks after all the costs are added up
any stock pickers post their historical performance?
i am pretty much all index funds right now and have a 1 year performance of 18.15%.
My brother has added some index funds thanks to my recommendation but still has a lot of individual stocks. his one year is 13 something%.
Saying you are all index funds with 18% one year return isn't actually saying much. It's like saying I have stocks and have a 30% return, it means relatively nothing to compare at such a high level of detail
Saying you are all index funds with 18% one year return isn't actually saying much. It's like saying I have stocks and have a 30% return, it means relatively nothing to compare at such a high level of detail
i know it isnt saying a lot but i thought it was sufficient given the high level nature of the topic. i am talking about the return of my entire portfolio (which is basically index etf's and a small cash position), not just a portion of it.
any stock pickers post their historical performance?
i am pretty much all index funds right now and have a 1 year performance of 18.15%.
What index funds are you in right now that you are getting 18.15% for 1 year?
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