This Stunning Data Will Make You RETHINK Investing in Individual Stocks... 📉

Timestamps:
0:00 Should you invest in individual stocks?
0:15 Contradictory Advice From The World's Best Investors
1:56 The Data is Stacked Against You
2:35 Incredible Growth as a Whole, Losers Individually
3:45 More than 50% of Stock Lose Money...
4:46 Stock Picking Isn't Just Difficult for Individuals
5:47 The Sequence of Return Risk in Individual Stocks
6:26 Average Investor Performance Over the Last 20 Years
7:25 The Lottery Dream
10:07 The Growing ETF Market + Options You Have
11:17 Dispelling Bad Investing Myths

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Always remember, "You Don't Need More Money; You Need a Better Plan"

[brucestiles]

Warren Buffett says that most people should invest in index funds.

[jefferydevens]

Such a good job with these videos. Thank you for the eduction. Learning lots and appreciate the heart of a teacher. Well done!

[paulsackles]

Genius work Eric; simple and clearly presented. Nice work!

[ld]

Another excellent video Eric. I appreciate all your effots to educate and share your knowledge. Larry Oman Ca.

[johnmininger]

I essentially have 3 stock portfolios outside of my retirement accounts. One is purely etf/funds and that is the largest. I have a portfolio of individual stocks that are boring old companies paying dividends, the PG and KO of the market. Generally the kings of their sector. That portfolio has killed it for me and held its own during downturns. Then there is my other portfolio ... riskier, lots of tech. That has been a wild ride.

[pcash]

Very informative. I hold mostly Index MFs but also hold Abbott Labs and Abbvie stock. The growth and dividends have been too tempting to give up. I would like to diversify out of these 2 stocks but just can’t seem to stomach the capital gains tax and not knowing something in a MF or ETF that would generate as much cash.

[risingdough]

Very good video, summarizing many of the ideas found in Burton Malkiel's "A Random Walk Down Wall Street."

As for investment professionals who out outperform the market, a few do exist (and fewer than one thinks, when it comes to consistency), but the chances of one finding one is slim and none.

And folks like Warren Buffet (who is a strong advocate of index funds for the common investor) are extraordinary investors, possessing resources unavailable to most everyone else.

In explaining why Berkshire Hathaway didn't invest in Wells Fargo, Warren acknowledged hiring private investigators to ferret out rumors of unsound sales incentive programs.

It's NOT a level playing field when it comes to information access.

[Random-ldwg]

guilty as charged! i am well aware of this but i have significant individual stock exposure.majority of my retirement plan is index funds. my taxable bucket is predominantly indiviual stocks with just 10 companies. largest position is 16.8%, 2nd largest position is 9.8% of my net worth. i have been fortunate overall in my individual stocks as they have had good returns. do they have to beat the market? majority have and as a whole yes over 11 yrs but more importantly their return is sufficient for my needs. as Munger once said during a daily journal meeting " i would rather own the companies i have than the majority of the companies in the s&p".

[sandyaerlangga]

Diversification is protection against ignorance - Warren Buffet

[AltayHunter]

10:07 You mention that there are funds oriented around every conceivable investment strategy, but I've been surprised by my inability to find a broad-market ETF with no dividends. Given how forced income can be a drag on returns it would be nice to be able to hold something like VTI (or VT) sans dividend-issuing companies, but I haven't been able to find any such ETF.

[ynAMeAj]

Focusing on cases like Warren Buffett maybe falling victim to survivorship bias sampling error. The correct way to evaluate the process Warren Buffett uses is to start at the beginning and study everybody who used his technique and see what their results are. This video may demonstrate an approximation of that approach.

[captsorghum]

6:33 It's hard to believe junk bonds had the second-highest return.

[BobSmith-zdnv]

My AAPL stock has outperformed the market…. Which is why so many focused on the FAANG stocks

[mrallan]

Yeah, like JP Morgan doesn't have a self serving interest in having you invest with them.

[alphamale]

I think your only chance is to follow the philosophy advocated in the old book "100 to 1 in the stock market", and then get lucky! One grand slam will compensate for a lot of outs.

[J-D]

I keep seeing videos like this, but my experience is that there are plenty of people out there that are outperforming the market. I've been outperforming the market (only marginally) for almost 10 years and my expertise is barely more than a novice. So I don't understand where this is coming from. If you held Apple or Microsoft over the last 10 years it's returned %20-50 every year when the SP500 was returning %10-30. Yet you always hear "past performance doesn't indicate future performance" every corner. I've missed out of potential loads of returns just because of that very phrase because I decided to invest in safer diversified funds. I stopped listening to that and my returns have skyrocketed. Yeah, I will have serious drawdowns and I'm perfectly fine with that, because I know I'll end up better off.

You bring up a good point about the problems that would arise from holding individual stocks into retirement which I hadn't thought of yet. But if they're in an IRA than there wouldn't be an issue with tax planning.

Love your videos! but I have to partially disagree with this one. :)

[alanl]

I hold well over 100 different high yield dividend stocks that pay me an average 8%-9% annual yield. My retirement portfolio has almost tripled in value in 11 years. I am thrilled with my individual stock picks, which an advisor service has helped me choose.

[dobiesj]

Index funds have their place. A diversified portfolio consisting of successful old and boring companies thats bought and held can outperform the major indexes both in returns and max. drawdowns over a long period of time. Most won’t do the research or be able to avoid tinkering with their portfolio. For those people an index fund is likely their best investment choice. As for actively managed funds, they can’t invest like an individual can. If you want to beat the market long term a portfolio consisting of 20 or less stocks is typically needed.

[vitawater]

Individual stocks are way too risky. If it is to be done, you will need to set up a trailing stop to protect any gains.

[andrewt]

but there are many stocks that have outperformed the benchmarks ?