Perhaps more important
than his individual stock picks however, is Einhorn's portfolio construct:
With MPT and asset allocation, the proportion of stocks to bonds is more important
than individual stock picking.
Not exact matches
Growth and margins for corporations matter more
than the Fed, Tepper said, adding that it's a moment to
pick individual stocks.
Rather
than having a professional
pick and choose
individual stocks, with an index fund, you own all or almost all of one particular kind of investment.
Thus, the book's recommended strategy is to buy a portfolio rather
than trying to
pick individual stocks.
Rather
than try to
pick out
individual stocks, he said it makes more sense for the average investor to buy all of the companies of the S&P 500 at the low cost an index fund offers.
ETF Investing holds many obvious benefits over
individual stock -
picking and several factors make ETFs Better
Than Mutual Funds.
Someone with a nice chunk of capital doesn't want to go through the motion of
picking individual loans, any more
than many investors don't want to go through the process of
individual stock picking.
Just as
picking individual stocks is fraught with risks, so too is
picking individual ETFs that may be much more concentrated and volatile
than SPY or AGG.
For many, there is a strong historical and emotional bias that a 3rd party or an expert can do a better job
picking a spouse
than an
individual... just like people hire a
stock broker to
pick stocks... they believe that a dating expert or matchmaker can screen candidates better.
ETF Investing holds many obvious benefits over
individual stock -
picking and several factors make ETFs Better
Than Mutual Funds.
Less
than 10 % of my retirement money is in
individual stocks, and over time I lag the S&P by just enough to calculate the cost of my «having fun
picking stocks.»
Top it all off with a sprinkling of
individual stock picks from BNN, each one making up less
than 1 % of the portfolio so they'll have no meaningful impact.
Having been around the investment community for over 50 years, I know that almost every investor thinks their
individual stock picks are better
than the market.
Thus, the book's recommended strategy is to buy a portfolio rather
than trying to
pick individual stocks.
Easier
than DIY investing with
individual stocks, but harder
than picking ETFs since you have to offset higher fees.
Statistically over time (10 + years), your odds of beating the market
picking individual stocks is less
than 1 %.
Rather
than picking individual stocks, a mutual fund is a readymade, diverse portfolio of different
stocks and bonds managed by a financial expert.
Choosing from among the three Canadian - market dividend ETFs traded on the Toronto
Stock Exchange is faster, easier and safer
than picking individual dividend
stocks.
You never have to worry about
picking stocks because the market is more resilient
than any
individual stock.
The early research on index investing has been aimed at making the case for investing in an index rather
than picking individual stocks.
Based on the annualized returns in the first two statistics here, these results would seem to endorse
individual stock picking rather
than investing in something mundane like an S&P 500 index fund.
While
individual stocks may be able to give you greater gains
than many diversified mutual funds in the short term, (especially if you stay on top of things as far as researching your
stock picks, staying on top of news, etc), they can also carry with them the risk of greater losses.
The reason why Warren Buffett is more of a household name
than Charlie Munger, Seth Klarman, Peter Lynch, Donald Yacktman, and John Neff is not because Warren Buffett is better at
picking individual common
stocks than those other gentlemen.
Most experts recommend that you allocate no more
than 5 % — 10 % of your total portfolio to a basket of
individual stocks that you will
pick yourself.
As an
individual investor, you'll still need to figure out which funds to buy, but that's monumentally easier
than picking individuals stocks and bonds!
Now, to avoid having to mess with portfolios or look at positions, one thing you can do is simply index rather
than pick individual stocks.
If you prefer to buy the market, rather
than pick individual stocks, how does that look?
Van Nest also advises the Martins avoid
individual stock picking and not make investing any more complicated
than it has to be.
But these funds are a better way to invest
than to
pick individual stocks especially in these foreign countries.