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Adams argues that the individual should not be buying individual stocks. I tend to disagree for individuals willing to keep up with their stocks, and can read
by ibsulon 18y ago
Adams argues that the individual should not be buying individual stocks.
I tend to disagree for individuals willing to keep up with their stocks, and can read 10-Qs and other investment material. if you're doing the "buy and ignore" thing, however, it doesn't make much sense.
I've been guilty of not being as active as I should be, relying on meta information far too often. However, the vast majority of my investment is outside individual stocks and in indexes.
- tomsaffell 18y agoRight, he's saying don't trade individual stocks, buy indexes instead. I fully subscribe to this view, unless the individual is trading for a living (putting in many hours), and has enough capital that they aren't wiping out their gains (relative to the index) with trading costs and the opportunity cost of their time. IMO, you can read all the investment material that you like, but if you have access to the same information as the market then you wont outperform the market on a gross basis, and if you have lesser scale than professional traders then you will under-perform it on a net basis (after costs).
- run4yourlives 18y agoSorry, but let me get this straight. There are people out there that buy stocks before contributing to their 401k's? Aren't 401's tax deferable? Aren't normal capital gains taxable? This is about as dumb as putting money into your savings account before paying off your cc debt. Math. I suppose it's not everyone's strong point.
- nostrademons 18y ago401ks often get a company match as well, which is a wonderful thing.
- comatose_kid 18y agoAnd you can trade individual stocks in your 401k.
- njharman 18y agoI can't.
- comatose_kid 18y agoI should have qualified that - your company's 401k partner needs to support it. We use fidelity where I work, and you can sign up for a self directed brokerage link account. This is a relatively new option for us.