Still, stock picking is a very difficult game to play and in my opinion, it is better to invest only a small portion of
portfolio in individual stocks.
Stock markets and
investments in individual stocks are volatile and can decline significantly in response to market, foreign securities, small company, exchange traded fund, investment style and management risks.
While investing
directly in individual stocks is more exciting when getting started, maximizing resources on a limited student budget means mutual funds often the better investment.
People often wonder whether it is actually possible to make profitable trades by taking advantage of seasonal
trends in individual stocks.
Most of my portfolio is
in individual stocks which might not do any better than index funds in the long run, but they have done pretty well for me so far.
And you'd need a lot more capital to make buying, voting, and selling
in individual stocks as if you were running your own personal index fund worthwhile.
And if you are the sort who has set aside a portion of your portfolio to invest
in individual stocks then our All - Star Stocks ranking is essential reading.
Since you're only investing a small portion of your
account in individual stocks, you don't need more than five or ten that you really like.
Investing
in individual stocks takes a huge amount of time and with two small children I'm going to guess that you probably don't have that sort of time.
For me this
experiment in individual stock picking has confirmed that for me the best route to go is investing for the long term via well diversified index funds.
There are still great benefits to investing
in individual stocks for those willing to put in the effort needed to make intelligent picks.