10 Facts They Don’t Tell You About Investing In Stocks

If you invest in stocks there are some things it's critical to understand, so in this video I'll go through some of the lesser-known but important facts that I think you should know to help you get the best returns from investing.

What Else PensionCraft Offers:

Timestamps
00:00 Introduction
00:18 Understanding Stock Returns
02:00 The Night Effect: Overnight Stock Movements
03:46 Stock Splits and Their Impact
06:18 The Importance of Liquidity
07:59 Predictability of Stock Returns
12:20 The Changing Landscape of Companies
15:30 Valuation and Market Efficiency
18:28 Conclusion and Final Thoughts

I Use The Following Data Sources To Help Me Create My Videos
(These links provide new users with a special offer and may also provide me with a small commission)

Where Else You Can Find Me

Take A Look At Some Of My Other Videos

DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.

[jespersahnerpedersen]

Interesting analysis from Jeremy J. Siegel in "The Future for Investors":
"Those who bought the original 500 firms and never sold any of them outperformed not only the world's most famous benchmark stock index but also the performance of most money managers and actively managed equity funds, " Siegel writes.

The normal S&P 500 returned 10.3% a year from its 1957 founding through Dec. 2003.

But if you stuck with the original 500 components, letting dying companies die and reinvesting proceeds from companies that were bought out into the surviving companies (there were 125 of them left by 2003), you earned 11.3% a year.

That might not sound like a big difference, but it is.

One dollar invested in the normal S&P 500 in 1957 grew to $93 by 2003. In the "survivor only" portfolio, it grew to $124.

[EricBlair]

I watch you a lot and always like to hear what you have to say. This video in particular is just fantastic. Thanks!

[Dominic_Bolton]

Thanks Ramin, I’m a beginner investor, I started in December, and I’m changing my tack having learned from your and another couple of YouTube channels
Firstly, I’m sorting my pensions, moving from SJP and Fidelity to Invest Engine. Secondly, I’m selling many of my stocks and putting them into an ETF. anything (Barclays, BT) that has grown massively is getting sold, anything where my holding is small is going. I’m holding onto a few that I think will grow over the next couple of years (NG., VODA, STJ), but eventually they will be sold as well, and I’m keeping my moonshot (TMC)
I’m self employed, and I’ve found I spend far too much time looking at T212 instead of earning the money to invest. Hopefully this helps and I can be more productive as a result

[MA-pudc]

Great video. Very informative. Thank you for sharing your knowledge.

[keithlos]

Excellent video Ramin...i can verify some of these failure percentages unfortunately 😂

[joeegg]

Thanks Ramin, always like to hear your view on these matters. Makes me realise that there is always a lot more to consider than price when assessing stocks.

[GavinLawrence]

I recall Terry Smith saying something along the lines of preferring to own a large portion of fewer good companies, compared to owning a little bit of a lot of bad companies.
Lately I see the T-class has underperformed the S&P, not sure if that's happened to him before.
I know they have Microsoft, but is the underperformance strictly down to not having Nvidia?

[andrewkingdon]

I buy individual stocks. I am not an expert. I only do it because I enjoy it. Some people look at racing trends and gamble on horses. I look at stock markets and trade but not gamble. Gambling (in my opinion) is the difference between crossing the road with your eyes closed and following the "green cross code". Chalk and cheese. I try to do due diligence when buying stocks. I always ask my self "am I gambling when I buy this stock or am I happy it's an investment?". As I said I'm not an expert and I've been investigating for 20 years and I treat it like a hobby and yes I've made mistakes (usually when I get excited about something) and I then stop and learn from that mistake. Put simply I think you can learn how to invest but it's not easy and it takes time to learn (mainly about yourself and your own error making habits and inability to learn from mistakes).

[armuk]

Useful breakdown. A question - if one has a lump sum to invest (in ETFs), it better to put it all in one go, or to stagger the payments/investments (a la dollar cost averaging)?

[geetpeetnsnsnjj]

Need to ensure when showing returns they are adjusted after inflation. Distribution should be similar to what you showed but the drift isn't as significant as you may think.

[christerdehlin]

Thanks! That seems like some very solid advice indeed. My strategy is to complement a global index fund with an emerging markets index fund and a couple of sector funds, because the MSCI World and S&P 500 are so skewed towards the American tech giants. My hope is that this will insulate me to some degree from a possible tech bubble burst.

[finsecker]

When a stock price is quoted, is that normally the price someone selling will get (offer price?)? If so, how can I see what I'll actually pay (bid price?) Thank you for the geat videos and podcast.

[roberthuntley]

OFF TOPIC - Just requesting that you produce a short video explaining what will happen with small retail holders of Royal Mail (IDS) shares if the recommended takeover goes through. As I understand it, there will be a shareholder vote but I'm very unclear about what happens after that (as an example, do you pay dealing costs if the shares are cancelled).

Thanks in advance.

[robdan]

Point is just 'buy global index, 😊

[Nik-B]

Hi @Pensioncraft is there an index that follows momentum, buying best performing stocks over a period and selling the worst performing stocks over that same period?

[mhoward]

Hi. Out of interest Do markets stay open all weekend. Iv noticed with IE not much Happens in stock prices on Saturday. Maybe a little change but on a Sunday nothing. Wasn’t sure if this is just IE not updating on a Sunday or if most markets close and nothing much happens in way of prices.

[simonunion]

Is there any point in having a large index to track having a top 10 from each developed country maybe just as good and less trading fees trading in the index ?

[MrDoyley]

Those rare stocks you describe aren’t hard to find if they have the huge market cap needed to prop up the index. Surely better to by a bag of the big 5 tech companies than a Nasdaq index?

[fredatlas]

If you invested in the Vanguard global small cap index fund wouldn't that avoid the bid offer spread. It appears to have a Lower fund charge than ishares etf that tracks the same msci global small cap index. Personally I don't think it's worth it as you are just taking on volatility risk for most likely no extra returns

[coderider]

I was ready to buy apple at $165 in April (fun buy), Jim Cramer/ mad money that day said it’s was a sell sell sell and played his bear noise! I just continued with the Developed world fund instead. Only individual stock I would ever own.