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There's a middle ground between day trading and just putting your money in an S&P 500 index fund and never looking at it again. Trading stocks can be fun and he

There's a middle ground between day trading and just putting your money in an S&P 500 index fund and never looking at it again. Trading stocks can be fun and help you make a lot of money if you're able to spot undervalued investments. It's very complicated, but anyone can learn the basics of value investing and do a little bit of stock picking on the side.

stouset 9y ago
That is an absolutely gargantuan “if”, given that any particular retail investor is overwhelmingly unlikely to possess novel knowledge or insight in any market. The number of times this ever happens is outweighed a millionfold by the frequency of times where people incorrectly believe this to be the case. What happens in the vast majority of cases is that people believe they’re making money, but after fees are actually losing to index funds. Or people believe they’re making money, but lose their shirts the moment the market turns sideways. Or people do succeed due to completely random chance, but the level of risk they took on to make that return is significantly higher than other investments with comparable returns.
- omarforgotpwd 9y ago
  That's true, most people likely won't know what they're doing. But it's possible to spend some time, pick up something like The Intelligent Investor by Ben Graham, and invest a little yourself. Ordinary people can sometimes have investable insights that most players in the market are not aware of.
- smileysteve 9y ago
  > given that any particular ~~retail~~ professional investor is overwhelmingly unlikely Reminder from Random Walk Down Wall Street; Professionals rarely beat the S&P 500 Index on a time horizon. It's statistically likely, that if a professional fund does beat the index one year, then it will underperform the next year.
rifung 9y ago
While I also would like to learn how to trade stocks and believe in value investing, I think this comment severely understates the difficulty of beating the market. Let's not forget that the vast majority of professionals who do this day in and out can not beat the market on consistently.

stouset 9y ago

That is an absolutely gargantuan “if”, given that any particular retail investor is overwhelmingly unlikely to possess novel knowledge or insight in any market. The number of times this ever happens is outweighed a millionfold by the frequency of times where people incorrectly believe this to be the case. What happens in the vast majority of cases is that people believe they’re making money, but after fees are actually losing to index funds. Or people believe they’re making money, but lose their shirts the moment the market turns sideways. Or people do succeed due to completely random chance, but the level of risk they took on to make that return is significantly higher than other investments with comparable returns.

omarforgotpwd 9y ago
That's true, most people likely won't know what they're doing. But it's possible to spend some time, pick up something like The Intelligent Investor by Ben Graham, and invest a little yourself. Ordinary people can sometimes have investable insights that most players in the market are not aware of.
smileysteve 9y ago
> given that any particular ~~retail~~ professional investor is overwhelmingly unlikely Reminder from Random Walk Down Wall Street; Professionals rarely beat the S&P 500 Index on a time horizon. It's statistically likely, that if a professional fund does beat the index one year, then it will underperform the next year.

rifung 9y ago

While I also would like to learn how to trade stocks and believe in value investing, I think this comment severely understates the difficulty of beating the market. Let's not forget that the vast majority of professionals who do this day in and out can not beat the market on consistently.