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Unfortunately a lesson I had to learn for myself. Hopefully I can pass it on to the next generation, but I fear they'll have to learn it for themselves too. Don

Unfortunately a lesson I had to learn for myself. Hopefully I can pass it on to the next generation, but I fear they'll have to learn it for themselves too. Don't pick individual stocks people, buy broad index funds at most.

vjvjvjvjghv 11mo ago
The temptation is always there though. I have several stocks that produced life changing gains.
- pendenthistory 11mo ago
  Having nice gains early on fools you into thinking you're smarter than the market. That just makes your inevitable fall that much harder. Nobody made a lot of money on a stock and then thought to themself "I bet I was just lucky, I should probably stop now". Like everyone you will keep going until you lose out big.
betaby 11mo ago
> Don't pick individual stocks people We are in the industry, and perhaps we indeed know better. > buy broad index funds at most That gives slightly better than the inflation rate ( Canada ).
- jonasdegendt 11mo ago
  > That gives slightly better than the inflation rate ( Canada ). What do you mean? Over the last year any one of the index funds I'm in has beat inflation by a factor of five, some beat inflation by an order of magnitude. My worst performer is an iShares world fund, which generally has more temperate gains, clocking in at 10% YoY. Looking at Canadian indices such as $VCN, it's the same story.
  - betaby 11mo ago
    As of October 2025, in the previous 30 Years, the Vanguard FTSE Canada All Cap Index (VCN.TO) ETF obtained a 8.72% compound annual return. ~2x better than the official inflation over the same 30 years. I don't see the factor of five or order of magnitude. Also those gains are taxable.
    - YZF 11mo ago
      If you're in Canada you almost certainly want to diversify from Canadian indices. US markets have tended to outperform. Indices can return >20% one year and -10% other years. I think OP is talking recently, not over 30 years. Over the long term indices like the S&P 500 tend to have a real return of 6-7% ...
      - osti 11mo ago
        That's the biggest problem I have with the recommendation to buy indices as if indices grow at >8% annually is an natural law. Many (most) indices of countries in the world performed way less than 8%. US performed exceptionally well over almost a century so people are starting to take it as a natural law. If I buy US index, I'm still putting a directional bet on US stock market performing at an exceptional rate.
        throw0101a 11mo ago
        One can buy "all-in-one" index-of-index funds that have all US equities, all EU, etc. In Canada (which sub-thread stated with), see VEQT or XEQT (100% equities), VGRO/XGRO (80/20), VBAL/XBAL (60/40), VCNS/XCNS (40/60). You can probably find an 'asset allocation' fund in most countries; e.g., in the US: * https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds https://investor.vanguard.com/investment-products/mutual-fun... There are also (more dynamic) 'target date' funds, where the bond allocation increases over time.
        osti 11mo ago
        Yeah, and those have underpermed historically and it's definitely not recommended by most people.
Esophagus4 11mo ago
I would have said this, but someone responded with a comment that stuck with me: We’re on a forum of an incubator whose goal is investing in high risk startups to find the next unicorn. So there are probably people here who feel the same way about investing. While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better. It’s lower likelihood and not as repeatable, but for some people, that’s the strategy they want.
- throw0101d 11mo ago
  > While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better. Most stocks suck: > We study long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. We document that the majority, 55.2% of U.S. stocks and 57.4% of non-U.S. stocks, underperform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020. Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3710251 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3710251 > Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills. These results highlight the important role of positive skewness in the distribution of individual stock returns, attributable both to skewness in monthly returns and to the effects of compounding. The results help to explain why poorly-diversified active strategies most often underperform market averages. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 And it's not always the same 2-4% of stocks: a stock may shoot up in value, and if you're holding it at that time to can capture that, but once it has already gone up it may perform average-to-poor going forward. At that point, if you're still holding on it, it will be a drag on your (average) returns.
al_borland 11mo ago
If you do want to dabble in individual stocks, keep it as a small percentage of your portfolio that you’re willing to lose.
YZF 11mo ago
And certainly don't buy individual stocks because of FOMO or day trading or some wishful thinking. I pretty much only invest in indices except for rare small fun picks where I'm ok with losing. But over the years there were certainly times where this was a too conservative stance. My small bets have outperformed my conservative portion - by a lot. That said, those times were I am confident in those bets are rare, like a few times a decade.

vjvjvjvjghv 11mo ago

The temptation is always there though. I have several stocks that produced life changing gains.

pendenthistory 11mo ago
Having nice gains early on fools you into thinking you're smarter than the market. That just makes your inevitable fall that much harder. Nobody made a lot of money on a stock and then thought to themself "I bet I was just lucky, I should probably stop now". Like everyone you will keep going until you lose out big.

betaby 11mo ago

> Don't pick individual stocks people We are in the industry, and perhaps we indeed know better. > buy broad index funds at most That gives slightly better than the inflation rate ( Canada ).

jonasdegendt 11mo ago
> That gives slightly better than the inflation rate ( Canada ). What do you mean? Over the last year any one of the index funds I'm in has beat inflation by a factor of five, some beat inflation by an order of magnitude. My worst performer is an iShares world fund, which generally has more temperate gains, clocking in at 10% YoY. Looking at Canadian indices such as $VCN, it's the same story.
- betaby 11mo ago
  As of October 2025, in the previous 30 Years, the Vanguard FTSE Canada All Cap Index (VCN.TO) ETF obtained a 8.72% compound annual return. ~2x better than the official inflation over the same 30 years. I don't see the factor of five or order of magnitude. Also those gains are taxable.
  - YZF 11mo ago
    If you're in Canada you almost certainly want to diversify from Canadian indices. US markets have tended to outperform. Indices can return >20% one year and -10% other years. I think OP is talking recently, not over 30 years. Over the long term indices like the S&P 500 tend to have a real return of 6-7% ...
    - osti 11mo ago
      That's the biggest problem I have with the recommendation to buy indices as if indices grow at >8% annually is an natural law. Many (most) indices of countries in the world performed way less than 8%. US performed exceptionally well over almost a century so people are starting to take it as a natural law. If I buy US index, I'm still putting a directional bet on US stock market performing at an exceptional rate.
      - throw0101a 11mo ago
        One can buy "all-in-one" index-of-index funds that have all US equities, all EU, etc. In Canada (which sub-thread stated with), see VEQT or XEQT (100% equities), VGRO/XGRO (80/20), VBAL/XBAL (60/40), VCNS/XCNS (40/60). You can probably find an 'asset allocation' fund in most countries; e.g., in the US: * https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds https://investor.vanguard.com/investment-products/mutual-fun... There are also (more dynamic) 'target date' funds, where the bond allocation increases over time.
        osti 11mo ago
        Yeah, and those have underpermed historically and it's definitely not recommended by most people.

Esophagus4 11mo ago

I would have said this, but someone responded with a comment that stuck with me: We’re on a forum of an incubator whose goal is investing in high risk startups to find the next unicorn. So there are probably people here who feel the same way about investing. While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better. It’s lower likelihood and not as repeatable, but for some people, that’s the strategy they want.

throw0101d 11mo ago
> While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better. Most stocks suck: > We study long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. We document that the majority, 55.2% of U.S. stocks and 57.4% of non-U.S. stocks, underperform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020. Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3710251 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3710251 > Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills. These results highlight the important role of positive skewness in the distribution of individual stock returns, attributable both to skewness in monthly returns and to the effects of compounding. The results help to explain why poorly-diversified active strategies most often underperform market averages. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 And it's not always the same 2-4% of stocks: a stock may shoot up in value, and if you're holding it at that time to can capture that, but once it has already gone up it may perform average-to-poor going forward. At that point, if you're still holding on it, it will be a drag on your (average) returns.

al_borland 11mo ago

If you do want to dabble in individual stocks, keep it as a small percentage of your portfolio that you’re willing to lose.

YZF 11mo ago

And certainly don't buy individual stocks because of FOMO or day trading or some wishful thinking. I pretty much only invest in indices except for rare small fun picks where I'm ok with losing. But over the years there were certainly times where this was a too conservative stance. My small bets have outperformed my conservative portion - by a lot. That said, those times were I am confident in those bets are rare, like a few times a decade.