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> ... I cannot stop my brain thinking it's gambling. Without insider knowledge I don't understand how I could beat the market short term. That's a smart concl
by auxym 9y ago
> ... I cannot stop my brain thinking it's gambling. Without insider knowledge I don't understand how I could beat the market short term.
That's a smart conclusion that's correct in the vast majority of cases. Day trading, especially as a retail investor, is mostly gambling.
If you have funds to invest medium-to-long term, index investing using low cost, well-diversified funds really is the best thing you can do. Is it gambling? Year-over-year, an equity fund will certainly have wide swings up and down. However, since your horizon is long term, most people think that the market will be going up, averaged over the long term (a decade +). That is what the past has showed us.
While past results are not a guarantee of future performance, it would be highly surprising for the market as a whole to do down, or even stagnate, for a period of 10+ years. Yes, people often cite Japan, that's exactly why I stated well-diversified funds above: limiting yourself to a single country can be risky.
What is certain, is that if you are sitting on large sums of cash, inflation is eating away at it. You are actively losing money.
- Retric 9y agoLiquidity has value. Keeping say 10-20k in a checking account seems really dumb, but if that let's you avoid bank over draft fees and credit card interest that savings can easily keep up with inflation.
- auxym 9y agoDefinitely agree :) By large sums, I was mostly thinking 100k+
- morgante 9y agoIf you just invest that money in a good brokerage, you should easily be able to take it out as a margin loan when necessary.
- Marazan 9y agoHint, huge market downturns wiping out your stocks account correlate with times people suddenly need access to free cash.
- votepaunchy 9y ago> Liquidity has value. Keeping say 10-20k in a checking account seems really dumb, but if that let's you avoid bank over draft fees and credit card interest that savings can easily keep up with inflation. Or a Roth IRA for which th e contributions can be withdrawn tax-free and penalty-free at any time.
- Retric 9y agoEven then it still takes time, effort, and involves risks around both system issues and market crashes etc. Saying with more effort I can do X and get Y always has the cost of that effort.