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David, I do agree with you that there are win-win opportunities in the stock market. Investing in index funds (though plain vanilla they might be) is indeed be
by Rod 18y ago
David,
I do agree with you that there are win-win opportunities in the stock market. Investing in index funds (though plain vanilla they might be) is indeed better than having one's money rotting in a checkings account.
A few friends of mine decided to invest in small caps when they were still in college. In the first couple of months they doubled their money. Then they lost it all. If one does have a genuine passion for trading and investing then, by all means, keep trading and investing!!! If one is looking for fast cash, there are easier ways of making money... and there are more fun ways of going thru college than looking at stock quotes on a bunch of LCD screens.
- DavidSJ 18y agoIt sounds like your friends tried to beat the market, so their experience is not applicable to my advice. Nor is the need to spend your time looking at stock quotes on LCD screens.
- Rod 18y agoDavid, I don't know what your definition of "beating the market" is. What my friends did was to try to find undervalued small caps by looking at the fundamentals. In that sense, what they were doing was more "investing" than "trading". It worked really well for a while, then one of the companies failed to bring a product to the market on time and the stock took a nose dive. Well, the lesson to learn is that due diligence is a wonderful thing. In the arrogance of youth, these guys thought that looking at P/E ratios and other such figures would make them rich. They lost some money, but they're wiser now ;-)
- DavidSJ 18y agoBy beating the market, I mean trying to outperform, say, the S&P 500 by identifying underpriced stocks and buying them (and also, by implication, staying away from overpriced stocks).