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Investing in stocks is a waste of time for the common working man and a family. I tried it and wasted time and still didn't get it right. The only success I had was buying some cheap stocks in 2009 on major sale and holding. Recently sold and paid off student loan. And that was pure luck!!!
I will never buy stocks again unless they are back to 2009 levels, otherwise not worth the time, unless you millionaire and already have retirement account filled for retirement.
I still have an account for individual stocks, but have been building a fund account. Since I got more into real estate and finished school, I realized how time consuming my individual stock account was as I changed focus.
That would be a good point if individual investors were competing against them.
That would be a good point if individual investors were attempting to manage multi-billion dollar mutual funds. Otherwise, it's an apples and oranges comparison.
It's true that most who invest in stocks don't do a very good job. But the reasons for that often have less to do with the stocks they choose and more to do with basic investing mistakes, such as buying & selling at the wrong times, becoming emotionally attached to their stock(s), refusing to take a loss when they should, etc., etc.
As you know, even mutual fund investors, when left to their own devices, do poorly compared to the performance of the funds themselves, and for many of the same reasons that investors in stocks do.
Yes, investing in stocks does require much more research and attention than investing in funds, but to say that stock investors cannot possibly succeed because of a "research disadvantage" is not accurate, IMO. Even if you hand a large group of typical investors a portfolio of the best stocks out there, the majority will still find a way to minimize returns over the long run. Sad but true.
I do not see fund managers any different.every one has a common goal,to out smart the markets and beat them.
That is just what the small investor who does not want to index hopes to do.
The reason most fund managers beat the small investors is the fund managers usually have to stick to the restraints the fund has..
Most are not free to go to cash or to bet the ranch on anything they choose.
That keeps them more disciplined and always invested.
Small investors as a group do the wrong thing because they can go anywhere and have demonstrated they can do alot more wrong than good in doing so.
I diversify. I have stocks, bonds, mutual funds, index funds, corporate bonds, savings. I am not investing at this time as the market is rather unstable and it doesn't make sense.
markets never make sense. in the 25 years i have been doing it i could have given you a year by year reason not to invest , it is always the wrong time.
as they say markets love climbing a wall of worry and thats all we have had ever since i have been investing.
it was either fear of dropping further or we went up to much and are about to pop. well 1400% later i am still asking myself those same questions as far as it being the wrong time.
Last edited by mathjak107; 07-24-2013 at 03:14 AM..
That would be a good point if individual investors were competing against them.
False. Mathjak's point is good, and a very good apples-to-apples comparison, because individual investors can be compared against professional investors, and reasonable assumptions can be made with regard to the impact of the individual investor's typical comparative lack of access to research and to major stakeholders, comparative lack of experience and expertise, etc.
Quote:
Originally Posted by LongArm
It's true that most who invest in stocks don't do a very good job. But the reasons for that often have less to do with the stocks they choose and more to do with basic investing mistakes, such as buying & selling at the wrong times, becoming emotionally attached to their stock(s), refusing to take a loss when they should, etc., etc.
That would be a good point if the typical professional investor suffered from those maladies more so than the typical individual investor.
Quote:
Originally Posted by LongArm
Yes, investing in stocks does require much more research and attention than investing in funds, but to say that stock investors cannot possibly succeed because of a "research disadvantage" is not accurate, IMO.
Good thing that no one said "cannot possibly succeed", and instead all people were saying is that typically investors' success is limited by the factors outlined earlier.
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Originally Posted by darrell2525
Also, all Vanguard funds are index!
False.
Quote:
Originally Posted by darrell2525
I will never buy stocks again unless they are back to 2009 levels
That is exactly the approach to minimize your gains. Your statement here helps clarify why you've had such an unsatisfying experience investing.
markets never make sense. in the 25 years i have been doing it i could have given you a year by year reason not to invest , it is always the wrong time.
Except for the late 1990s. At the time, it felt like everybody and their pet turtle were making wild amounts of money in the stock market - or so they pretended to.
there was that bubble question during that time frame over hanging everything.
When you saw a Dot Com selling for $100 per share that had under $1M in annual sales and massive losses, you got the impression that there might be a bubble.
I do not see fund managers any different.every one has a common goal,to out smart the markets and beat them.
Well, sure, just like a sprinter and a marathoner both have the same goal of winning a foot race. But it's a different race, with different methods, different rules, different limitations and different advantages for each.
Look, most fund managers underperform the index, not because of research, but because of reasons that don't apply to small investors (e.g. expenses, necessary over-diversification, limited options on what they can buy, etc.). So to say, "if fund managers, with all of their research, can't beat the index, what chance do small investors have?" is misguided, IMO. It's a much different playing field for them than it is for us--that is why it's an apples to oranges comparison.
Research aside, small investors have some significant advantages over the big boys. And while I agree with you that the majority of individual investors aren't great decision-makers and aren't going to capitalize on those advantages--and I've already stated that--the more knowledgeable and experienced minority have a very good shot at beating the index. It's like margin: For many traders, it's a bad thing, but for those who know what they're doing, it's a good thing.
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Originally Posted by bUU
False.
Said with authority.
Quote:
Originally Posted by bUU
Mathjak's point is good, and a very good apples-to-apples comparison, because individual investors can be compared against professional investors, and reasonable assumptions can be made with regard to the impact of the individual investor's typical comparative lack of access to research and to major stakeholders, comparative lack of experience and expertise, etc.
See above. We all know that the pros have some advantages over the little guy. They're also playing a different GAME, with different goals, rules, and restrictions--many of these having a significant impact on returns--which is why comparing their results to ours is near meaningless.
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