Announcement

Collapse
No announcement yet.

Does anyone regret not buying individual stocks/staying with index

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • #16
    Don't listen to all of the noise.

    Comment


    • #17
      a few years ago I bought 100 shares of the top 10 companies in the S&P with the exception of Berkshire Hathaway , it seemed like a good approach at the time, but just looking at most mutual funds these companies are already presented heavily in the index, just based on market size , so I am not sure if I gained a significant advantage or not. But picking a cheap stock and thinking it is going to be a home run, is quite difficult even for the pros

      Comment


      • #18
        Its awesome if you pick winners, which is mostly due to luck and is not a repeatable process.

        People get all excited about picking stocks, but are mortified by any discussion of leverage. Really, you can crush most stock pickers LONG TERM records with some leverage. It doesnt have to be insane. 1.25, 1.5 on a safe large index with overall lower volatility is set and forget with better long term performance. Yes, it will be more volatile. Same is true for individual stocks except they can go away forever, indexes wont.

        KISS

        Comment


        • #19
          Really, you can crush most stock pickers LONG TERM records with some leverage

          please explain this process. If I have enough money to buy any stock I want what is the purpose of taking a loan to buy more stock ?

          Comment


          • #20
            Originally posted by Random1 View Post
            Really, you can crush most stock pickers LONG TERM records with some leverage

            please explain this process. If I have enough money to buy any stock I want what is the purpose of taking a loan to buy more stock ?
            if you could go back 10, 20, 30 years in time take out a big loan with low interest to buy market index, would you?

            Comment


            • #21
              Gave up on indexing almost a decade ago (at least as the majority of my portfolio) as the fund performance just couldn't keep up, and have done so much better with active fund choices since, with up to 100% returns on certain funds in a given 12 month period. On my trajectory hoping for 8 figures in tax advantaged retirement accounts in my early 50's. I seem to have figured out how to double every 4 years or so, on 8 figures that would be great marching toward full retirement age. I'm still 20 years away.

              I know FA's who index their clients money but not their own. Many of the Wall Street gang do this too with their own investments.

              Not too keen on individual stocks though. I want consistent overall outperformance for decades with all my picks without having to regularly buy and sell, not a one time TSLA or Moderna outperformance stolen by my bad picks. In hindsight though going with FAANG in 2009 would have been great though, and I know some that have done this at least for quite a few years now. Always learning for the future.

              But keep in mind. When I see consensus thinking like your post, I get very, very nervous about the market! I build up just a little more cash position as the time to do what you are considering is the next 2009 scenario. Just placed a sale earlier this week probably to a retail investor in full FOMO mode. Betting on some profit taking and tax loss harvesting soon. This mornings weekly jobless claims number wasn't great either. Employment rates is critical.
              Last edited by EntrepreneurMD; 12-10-2020, 06:01 AM.

              Comment


              • #22
                if you could go back 10, 20, 30 years in time take out a big loan with low interest to buy market index, would you?

                so if would of thought about this idea in 1970, took out a loan for $100,000 at 7 % (thats what the rates were then) and bought the S&P500 index on margin with borrowed money and held it for 10 years. The index over the 10 yeas did not go up but I would still be on the hook for interest payments of 7% x 10 years. This idea seems to work a whole lot better if the market goes up.

                Comment


                • #23
                  Originally posted by Random1 View Post
                  This idea seems to work a whole lot better if the market goes up.
                  lol yes that’s the idea. Risk increases. You have to be able to remain solvent through periods you’re underwater. Many have failed in such attempts

                  Comment


                  • #24
                    Originally posted by EntrepreneurMD View Post
                    Gave up on indexing almost a decade ago (at least as the majority of my portfolio) as the fund performance just couldn't keep up, and have done so much better with active fund choices since, with up to 100% returns on certain funds in a given 12 month period.
                    full disclosure your core fund dxqlx is an index fund - large cap growth, levered

                    Comment


                    • #25
                      Originally posted by jacoavlu View Post

                      full disclosure your core fund dxqlx is an index fund - large cap growth, levered
                      It is isn't it, at almost 30% of holdings. Guess I should say gave up on traditional or SP index funds. I prefer to look at it as a personal collection of 100 of the most successful companies in the US, but at twice the success. Ha!

                      Comment


                      • #26
                        Originally posted by Random1 View Post
                        if you could go back 10, 20, 30 years in time take out a big loan with low interest to buy market index, would you?

                        so if would of thought about this idea in 1970, took out a loan for $100,000 at 7 % (thats what the rates were then) and bought the S&P500 index on margin with borrowed money and held it for 10 years. The index over the 10 yeas did not go up but I would still be on the hook for interest payments of 7% x 10 years. This idea seems to work a whole lot better if the market goes up.
                        It depends on your margin rate and investing strategy. My margin interest is 2.5% and I have a really high risk tolerance with the way I invest/play in the market. Definitely high risk and high reward. Is it something I recommend to anyone else? Never as I don't know anyone else's risk tolerance and ability to hold through all the ups and downs or their personal situation.

                        The main use of margin is to leverage when you think you have an edge in the market for one reason or another. It allows you to capitalize on those times and then reduce margin use/leverage after you accomplish your goal. You just have to use it wisely and have a plan if/when the trade/plan goes against you.

                        Comment


                        • #27
                          Agree with the sentiments expressed. I think the more appropriate title is 'do you regret buying individual stocks'. As some others did, I traded individual stocks early in my investing 'career'. Some won, some lost. A couple won very large and those were the party conversations but on the net I can't say I beat the market (and I am now willing to acknowledge that the research says I likely didn't). But the time and stress definitely weren't worth any gains to me and knowing that humans generally put twice as much absolute value on negatives I suspect that the experience was a net negative. Very happy to be an indexer and not even compelled to have 'play money' but I don't feel it is unreasonable for those so inclined.

                          Comment


                          • #28
                            I guess I had a diversified portfolio before it was cool. I always had stocks both mutual funds (later etfs) and individual and bonds both individual and funds. I did ok picking stocks but it is time consuming. Now the only individual stock that I own is APPLE. I invested 65K in 2008 and it is worth over 800k now. This is why people invest in individual stocks. You really have to hold them for long periods of time to not be killed by taxes. I also could withstand it if it went to 0. Wideopenspaces I would keep the Amazon stock.

                            Comment


                            • #29
                              Originally posted by EntrepreneurMD View Post
                              On my trajectory hoping for 8 figures in tax advantaged retirement accounts in my early 50's. I seem to have figured out how to double every 4 years or so, on 8 figures that would be great marching toward full retirement age. I'm still 20 years away.
                              Don't sell yourself short. If you can double every 4 years (18% returns), you would easily have 9 figures in 20 years if you started today with a modest portfolio of 4MM. Do keep us updated.

                              Comment


                              • #30
                                Originally posted by wideopenspaces View Post
                                My husband's amazon stock vests in 6 days and I've literally been counting it down for months. I hate it, even if it's doubled since he got it. We will immediately sell, pay taxes, and invest the rest in index funds in our taxable account. Individual stocks are not for me. Too anxiety provoking. I don't know how people sleep at night investing in single stocks!
                                If I were you I would only sell 50% of it to cover the original vest. I would leave the 50% gained to see how it rides in the future.

                                Comment

                                Working...
                                X