The post is all in the title, I'm interested to know the purpose behind others investing decisions. Statistically most people underperform in the markets, and owning individual companies is the leading cause. Unknown gambling on companies without any proper due diligence, no consideration for portfolio construction, and unknown risk are how the average retail investors plays the game. Are you different? If not, whats the purpose of added risk premium for underperformance?
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32 Comments
Twenty-five And Invested@25andinvested · 12h
I am different 😌
Jaymes Mean@jamean · 12h
I work in procurement and i know how to read businesses...well at least the ones I understand. Im also not in it to beat the market, im in it to be wealthier than i was yesterday. I win just doing that. Individual stocks are also a fun way to learn how the world works if you really think about it.
Raj @double_oh · 9hEdited
When I was younger, I was fully invested in indexes. But once the portfolio was large enough, I wanted a few things other than raw performance. 1. Full control and knowledge of the companies I own: - I can choose not to invest in companies on moral grounds or if I think the CEO is an idiot (yeah, you, Elon). - I can look for companies that appear to be undervalued due to short-term noise. 2. Avoiding top-heavy concentration: - While an ETF allows you to hold many companies, it's heavily skewed toward the top few. - In top-heavy markets, this can lead to a severe concentration problem (I believe the S&P 500 currently has an AI concentration problem). - You might capture the gain of a smaller, off-the-radar company, but those gains get muted due to this top-heavy dilution. 3. Avoiding structural index friction: - Indexes telegraph their moves, leading to front-running and minor market manipulation. - This is well-documented and adds hidden drag beyond the (albeit low) MER of the ETF. I've already largely "made it" for retirement, so I am moving more toward generating growing income streams. I'm also leveraging quite a bit, so this income directly helps offset my borrowing costs.
Arneke @arneke999 · 8h
I’m cutting out a ~10% allocation for stockpicking purely for fun and learning. Although I am trying to buy stocks other than the megacaps.
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