Stock 101: Index or Individual or both?

[Chrish]

This is a good time to create this thread. From investment point of view, where should one put their spare money into? Conventional wisdom is to invest into total index. It’s relatively risk free strategy where you are guaranteed to get certain return because market always goes up in a long-term. While this strategy won’t make you necessarily rich, it will compound your wealth over a long period setting you up for a comfortable retirement.

Other strategy is to buy individual stocks of your pick after doing due diligence. There are lots of attractive stocks right now that if you have owned it at the right time, can make you a millionaire: Tesla, amd, e-commerce stocks, cloud companies etc. There are just several.

Online shopping/ technology is the future. Is index fund strategy getting outdated? Is now the time to pick individual companies that specializes in e-commerce and see your money grow exponentially? Or is this all empty noise and indexers should just stick to the fundamental of staying the course?

Or the third option is do 50/50 each. Which strategy will win?

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[Drugsarefun2350]

i pick index funds cuz I'm lazy and i don't feel like doing any research into individual companies, i'd rather drink beer, golf, and go fishing

 

[WVUPharm2007]

i pick index funds cuz I'm lazy and i don't feel like doing any research into individual companies, i'd rather drink beer, golf, and go fishing

Well stated.

 

[mentos]

Aren't you the guy that was day trading CVS and said TSLA would fail right before it soared to 1500, then bought bought NIO at its all time high before it dropped 30%?

I highly recommend you stick to indexing.

 

[Kardio]

Index for retirement, always.

Individual stocks and options if you want to have some fun.

Other strategy is to buy individual stocks of your pick after doing due diligence.

Massive financial institutions that actively manage accounts do ‘due diligence’ - that’s why a stock is priced at whatever it’s at. Unless you think you have more research power than these firms, it’s just your speculation.

 

[Sabril]

Other strategy is to buy individual stocks of your pick after doing due diligence. There are lots of attractive stocks right now that if you have owned it at the right time, can make you a millionaire: Tesla, amd, e-commerce stocks, cloud companies etc. There are just several.

It still sounds like a lot of speculation. I don't know about due diligence but those people that brag about making a killing nowadays from stocks sound more like swing traders to me.

 

[Chrish]

Aren't you the guy that was day trading CVS and said TSLA would fail right before it soared to 1500, then bought bought NIO at its all time high before it dropped 30%?

I highly recommend you stick to indexing.

I think Tesla is overvalued. But I don’t deny that lot of folks have made money from it. It’s just a one example of what I am talking about.

I made $100 bucks from Nio. It was never meant to be long term stock.

I am prepared for my views to be challenged. I would even change it if there is a convincing argument.

 

[Chrish]

It still sounds like a lot of speculation. I don't know about due diligence but those people that brag about making a killing nowadays from stocks sound more like swing traders to me.

I have a friend who is picking individual stocks and making money left and right. Almost all these companies are e-commence/ semi-conductors technology. That got me thinking: Covid might have changed business landscape forever where online trade has nowhere else to go but up.

Of course all this comes with inherent risk of company making a poor decision and all stock-holders loosing money.

 

[mentos]

I have a friend who is picking individual stocks and making money left and right. Almost all these companies are e-commence/ semi-conductors technology. That got me thinking: Covid might have changed business landscape forever where online trade has nowhere else to go but up.

Of course all this comes with inherent risk of company making a poor decision and all stock-holders loosing money.

Sounds like you're waiting for someone to tell you to pick individual stocks vs indexing. You've already made up your mind.

 

[Momus]

I have a friend who is picking individual stocks and making money left and right. Almost all these companies are e-commence/ semi-conductors technology. That got me thinking: Covid might have changed business landscape forever where online trade has nowhere else to go but up.

Of course all this comes with inherent risk of company making a poor decision and all stock-holders loosing money.

Do you like to buy high and sell low?

 

[Chrish]

Sounds like you're waiting for someone to tell you to pick individual stocks vs indexing. You've already made up your mind.

Nah.. Sticking with index as I don't really know how to interpret annual reports..

 

[Chrish]

Do you like to buy high and sell low?

Meaning? We are in a bull market and bear might claw again?

 

[Sabril]

Meaning? We are in a bull market and bear might claw again?

He probably asks if you are trying to time the market instead of dollar cost averaging.

I am guilty of timing the market myself. I bought Brk B back in april when it was kinda low. Nothing too exciting but then I am not planning to sell it anytime soon. I guess it's just something to make me more motivated to keep up with market news and how a Conglomerate does its bidding in this time and age.

 

[Charcoales]

1) Maximize index funds with lowest fees for 401k, roth ira, hsa
2) extra play money into either taxable index funds or yolo some individual stocks if feeling bored and feel like gambling :shrugs:

 

[farmadiazepine]

I think Tesla is overvalued. But I don’t deny that lot of folks have made money from it. It’s just a one example of what I am talking about.

I made $100 bucks from Nio. It was never meant to be long term stock.

I am prepared for my views to be challenged. I would even change it if there is a convincing argument.

It’s a complete waste of time to buy a risky stock to only make $100 off of it. It’s much easier to work 1 hour of overtime at work an make over $100. There is zero risk involved.