With free trading and the tight spreads on most equities and no edge, random trading shouldn’t hurt you that much. Your volatility will be worse, though. Sorry

With free trading and the tight spreads on most equities and no edge, random trading shouldn’t hurt you that much. Your volatility will be worse, though. Sorry for the plug, but here’s a blog post I wrote about it: https://smabie.github.io/posts/2019/11/28/div.html https://smabie.github.io/posts/2019/11/28/div.html (Diversification, Risk, and Leverage). Or you can cut to the chase and check out this graph: https://smabie.github.io/assets/div.png https://smabie.github.io/assets/div.png We run a Monte-Carlo and find the average return and vol for randomly generated portfolios for 2 stocks up to 50. The average return for all portfolios is the same while the vol decreases as you add stocks to the portfolio. While high vol will hurt a compounding portfolio’s return due to volatility drag, the arithmetic return will be the same. So, in other words l, if you have zero skill trading today (essentially buying and selling randomly) you’re not, on average, going to underperform the market appreciably. As such, I don’t think it’s a problem for individuals to trade long equities with no leverage with money that they need (since it’s basically the same as the market). The problem is when people start trading forex derivatives or options or whatever. The volatility of these instruments can be staggeringly high which can lead to risk of ruin (St Petersburg paradox etc).