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  1. #1

    Default Researching Individual Stocks. Worth the Trouble?

    Do you buy individual stocks based on your own research? Do you think it is effective? We hear a lot about how even the pros can't beat the averages, and they are supposedly the professionals doing this for a living. They are armed with every detail imaginable about a given company, and have access to some of the world's most powerful computers and algorithms. And even they have trouble beating the averages. So, what are you looking at when you do research? Are you getting recommendations from an advisor, or are you truly doing your own research with whatever tools you have available?

    How are you performing?
    I know in the current environment almost anyone can make money with almost any stock pick. But, what about during market downturns?

    Are we all wasting our time?
    Are we better off just buying index funds so we can focus our energies someplace else?

  2. #2
    Great question. I get it that a lot of investors feel that index and mutual funds are the way to go...but I never really heard a good answer from fund owners as to why value investors have a slight margin in returns over practitioners of other investing perspectives.

  3. #3
    I stick with index funds because I don't have the time or ability to out research the experts. The few times I have tried it in the past, I was either flat out wrong, or I got scared and bailed at the wrong time. Just not something I am good at.

    I also find it reassuring that 80% of the expert mutual fund managers that actively manage their holdings cannot beat my index fund.

    I do enjoy hearing success stories for those that do actively trade. I wish them the best of luck and hope they beat the odds.

    If I were to invest significant time in my investing, I think I would go the TexasHusker route and own a business and/or do real estate investing. I could get my head around that a lot easier than trying to understand why and when stocks go up and down.

  4. #4
    A whole lot of people have made a whole lot of money buying & selling individual stocks, and that is exactly what those that direct & manage your mutual funds and index funds do.

    The average guy is afraid of individual stocks because it is "putting all your eggs in one basket" where with a mutual fund you investment is spread out over many different stocks. Pretty unlikely every stock in a good fund would take a dump all at once.

  5. #5
    I own individual stocks. I own actively managed mutual funds. I own index mutual funds. The individual stocks are not a big part of our portfolio and I'm not actively buying more. The ones I have I've owned for many years, over 30 in one case.

    Buying individual stocks isn't tremendously difficult but it's definitely not as hands off as index or even actively managed funds.

 

 

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