We have all had the experience. Your cousin or your parents or the news gave you some hot stock tip, and you buy. These hot stock tips could be the worst investments of your life. Just remember, on the other end of your stock picks is another investor waiting for your pick to fail.
“Market timing can only be accomplished by liars.”–Bernard Baruch
“I don’t know of anybody who has done it successfully and consistently.”–Jack Bogle
Some behavioralists believe that the systematic errors of investors can provide opportunities for unemotional, rational investors to beat the market. While you are finding hot stock picks, the real investors are building wealth.
The U.S. stock market may have averaged over 9% per year over long periods of time, but only with tremendous volatility, including years when investors have lost as much as 40% of their capital. However, there is diversification and bounce back.
You can easily lose 50% or more in a particular stock and that stock may never recover.
Choose your lane.
DISCLAIMER: The information provided in these videos is only to be considered helpful hints and education. Nothing said or shown in any of these videos is to be misconstrued as specific tax, legal or investment advice. Consult with your tax, legal or investment professional before acting on anything you see in these videos.