In this thread I see crazy discussions about picking hot stocks, when to jump in or out, etc. I have been trying to do that for a few months and find it a little exhausting, both emotionally and time wise. I compared the performance of my hand picked stocks/etfs to that of the Schwab robo account I have been using, return is similar. I also did some research online, it says 95% of mutual fund managers canât beat the market. There were also advice to do dollar cost averaging to invest regularly no matter how the market is, and keep emotions out of it. So based on these, I find itâs counter productive to try to be hands on with investing. Seems like waste of time and energy, which could be better spent anywhere else, eg: to focus better on work to improve TC or to improve social life. Might be better to do just robo investing or pick broad etfs such as vtsax or vanguard target etc. Thatâs just how I feel. May be itâs not for me. Thoughts ?
When economy goes in non-volatile phase, robo investment makes sense. Either way DCA works good in long run. But in volatile economy like this in bull run, riding the wave makes big difference in your returns compared to average DCA strategy. It is like paddling the boat in calm water Vs river rafting.
The thing is you donât know when it will crash. So all the gains you think you are making now will get wiped when that happens. On the other hand someone with a diversified portfolio with regular contributions will have consistent returns. All it matters is how much total money you made over the long term
I highly doubt you understand investing when you said very confidently that all gains I made in last more than 15 years without passive investing will be wiped out. I think you need to learn investing from right sources and not crazy discussions lie you listed in your post. Or else just stick to passive investing, I will suggest you politely, this is not for you to get exhausted.
If you don't enjoy trading/gambling/investing and you aren't going to really put a lot of effort into it, passive investing is probably the best option.
The thing is you canât outperform the market consistently no matter how hands on your are (statistically speaking). So feels like itâs gambling and waste of time. If there was higher return (with good probability), then I would, but thatâs not the case based on the data. Think about it: 95% of fund managers canât beat the market (the guys who work full time analyzing the market)
The people beating the markets arent fund managers. You can beat it, companies definetly do. If they didnt why would electronic trader jobs exist for 30 years and pay out 80+ million to the worlds best traders.
For the past 4 months I've made 25% gains each month which is huge for being consistent. However, I wake up every day 30 minute before market opens and I spend 3-4 hours each day staring at charts and some more time towards closing as I reposition or close out. This is a once in a decade opportunity with how much volatility there is and with the stocks trading as sectors. But luckily I can start work later (mostly have late meetings) and can work late. But it honestly is a ton of work and it's a slow and painful process to begin with. You have to great it like a real skill/talent and put a lot of time and practice in. A lot of people have been trying to YOLO ok big gains, and sometimes it works but they don't show you when they lose it all on the next try. You have to keep an eye on the bigger picture too, you can't tunnel vision on certain dtocks. This is definitely unsustainable so I keep one foot out the door in case the market as a whole starts to slide. Then I'll just throw it all in etfs or value stocks
How much have you gained so far ? Also donât think you will be a able to time it out of the market, like you are saying
Doubled from 100k to 215k. So not really 25 each month but averaged. I never leave more than 33% in the market overnight when I can't trade and all my big positions have stop losses. I might lose 10-20% on the way down if everything crashes but I'll still be net positive huge
Just buy any of the ARK funds. Way easier than actual investing
They've been doing very well in Bullish market. But how would they handle the upcoming crash?
You know you're in a bubble when you have a hedge funds that specializes in buying overvalued stocks and bitcoin.
OP, I checked your responses, it seems like you have a strong conviction that you âdid some research online(??)â and âit says 95% of mutual fund managers canât beat the marketâ And then you are going after every post sharing their wisdom in right attitude telling them they all are wrong and then that 95% fund manager rap... seriously dear if your are so convinced then why are you asking here? đ Investing and picking stocks is not for all and definitely not for faint hearted emotional people where as some people really like it and very good at it, some random research on âinternetâ about what 95% mutual fund manager does do not deter them. If I had been doing DCA instead of picking right stocks and betting on FANG + MSFT, I wouldnât have made my stable fortune. I see some contradiction loaded with phobia in your post but you just donât want to accept that anyone else doing differently could succeed. I donât understand it. You are preaching to keep emotions out(I guess that was the only sensible part I saw in your post) and then you are the one telling us that you have been trying picking hot stocks, when to jump in or out that for a few months and find it a little exhausting, both emotionally and time wise. Nobody here telling you that their strategy is jumping out in anxiety like that. If you canât understand different thoughts than your convictions then you should not be asking blinders what are their thoughts. Your are right, this must be very exhausting for you. One free advice I would suggest, jumping out of the stocks out of anxiety or by some crazy discussion is not investing.
Not sure why you are so salty with your response, I am just asking a question and giving my point of view here. Regarding â95% canât beat the market â, just Google it and see how many articles you will find. Regarding beating the market, see if you can consistently do that, all it matters is how much profit you make in total over say next 20 years. If you are doing it consistently then good for you. Now compare the time/energy you are spending on it and see if itâs worth it. Yes could boost your TC with that. Anyways, May be itâs not for me. Regardless no need to be salty with your response. I just want a healthy discussion
Didnât look like healthy but I guess you had lot of misunderstanding about investing. People who donât diversify completely and donât do passive investing doesnât mean they trade every day and sell every month. People who pick their own stocks also plan for holding it for long term. And picking the stocks doesnât mean they hate index funds, they may diversify but at the same they could be relying more on their foresight for emerging sectors to pick the right stocks instead of doing it passively.
I donât think beating the market right now is that hard. In general outperforming the market consistently over long periods of time is very hard. If there ever was a time to be a stock picker and trader itâs now. We may not see a market like this again for awhile. Or maybe this is the new normal, who knows. But I think a lot of people are trying to make their money when outsized gains are available right now. Lots will end up wrecked when it eventually crashes but if you use some risk management that doesnât have to be you.
This is absolutely the wrong point of view. I'm going to throw some ice cold water on your way of thinking but it's for your own good so listen up. You work at Google, one of the top five companies in the world to work for, by many measures, maybe even #1. The hiring bar at Google is exceptionally high and only the most competent, resilient, intelligent, conscientious, and successful people get hired there, more or less. You're one of those people. Surely at a bare minimum p90 or p95. So why do you all of a sudden think it's a good idea to invest your money like the lowest common denominator of ignorant, layabout, cognitively impaired simpleton by abdicating your brainpower to a long and nondiscretionary list of stocks that will perform at the exact midpoint of all investments? You are not an average person, don't invest like one. Do you really think that some vague statistic about hedge fund managers benchmarked against an index is telling even a fraction of a percent of the whole story? Use your critical thinking skills. Ask yourself why that is. Do you think that 95% of investment results perform exactly like the broader market? You yourself invested in a single momentum stock by virtue of your decision to join Google and as a result you beat the pants off of anyone who owned equities through an index fund. There are limitless ways to identify targeted investment opportunities that crush the indexes like a bug, over and over again. Find them. It's really not that hard. The only thing that's holding you back right now is that you have a loser mindset. That may sound harsh, but the only thing that's blocking you from leaving your dead center average fund-investing peers in the dust is that you're asking "why?" instead of "why not?" You can pick stocks, you can pick options, you can incur more risk, you can collect more tendies, and you can assert your dominance over those lesser than you. The first thing you have to do is believe it.
I know OPâs point of view is wrong but look like he is misguided and involved with some half baked knowledge buddies who jumps in and exits the positions on anxiety or I donât know his internet thing. He may need some right sources. I know he is not the only one, some of my friends in my circle believes you can loose all your money in stocks, tc mean literally to $0. Some are scared to put in even a 401K.
Thanks for the kick guys. I have gained 40% (200k almost) in last 6 months, but it took a lot of time and effort on my part. I also have a Schwab robo account that gave similar returns. So I was wondering whether it was worth the time. I also tried trading in the past, but wasnât able to beat the market consistently. Anyways, I might need to be more educated I guess. Any recommendation on the resources ?
I use Vanguard's auto investing feature which allows us to invest as frequently as every week. I then picked 5 vanguard funds, one for each week day, and all of these 5 funds I put in $100 per week. This means every trading day I put in money to a Vanguard fund no matter what. VTSAX and VFIAX are among the 5 funds.
You are experiencing one of the most euphoric bull markets of the ages. Most laymen here think they are able to outsmart the active traders who spend their 50 hours a week day job + huge computing resources. But just like GME went from 10-400 and made some people early rich, the long term market cycle is of the same one. Retail canât compete with smart money and passive strategies. Everyone thinks theyâre special and exceptional. They will not do well at withstanding years of losses on fundamentally unsound companies, many who will never profit and others only existing due to artificially low bond prices, preventing the massive debt from crushing them. Stick with VTI + VXUS. Youâll thank yourself over the decades. Or you can learn the hard way and make yourself over to Bogleheads.org like some of the other wiser folks who had to learn the same lessons.
>"Retail" who spends hours per week on research doesn't have the resources to compete with hedge funds. >But passive investor who spends literally 5 minutes every month researching companies they invest in can. This just doesn't sound right.
Passive investor doesnât spend any minutes a month. Youâre relying on crowdsourced price discovery that the aggregate of all the market buyers and sellers have approximated the true value of the shares. If there were stocks undervalued, someone smart would bid them up, and if they were overvalued, someone smart would short them down. Itâs not perfect, but youâre relying on millions of man and machine hours for accurate prices instead of your own.
Dollar cost avg is good while market is at ATH like it is now, but most of the time itâs â time in the market > timing the market Buying $VTI and holding for 5 years will likely beat out buying and selling shares or ETFs throughout 5 years
So essentially you agree with my point of investing passively.
Unless you need short term gains and use the market as a casino. Yes.