Okay, horror story is a bit extreme but I needed to capture your attention.
Approximately 20 years ago, I often read an extremely popular and reputable site for investment advice. Yes, it still exists and I still use them as a valuable resource.
One day, they offered me access to some of their "stock picks". In the advertisement, they discussed how they were the advisors to recommend such-and-such firm so many years years ago and how the stock increased 350% over the next two years. If the readers had listened to them, we'd have thousands of dollars today!
One of the stock picks was in my price point, so I purchased about 35 stocks for around $5 per share or $175. The stock had recently fallen from over $55 a share but based on all the things advisors base their recommendations on, they said it was a "buy" stock! I made the investment decision that if I lost $175, I would be okay with that. I haven't bought many stocks, but that is what I base my investment decisions on which is why I wouldn't invest $1,000, if I had it, for 200 stocks, even if it could make me thousands in return. Without knowing what it was called at the time, it was my risk strategy!
This stock still sits in my portfolio, at a loss. I keep it because despite its "sell" rating, I have "buy and hold" stuck in my head. I may need to reconsider this one! I'm probably a fool to hang onto it! I'm certainly losing at both inflation and compound interest! Perhaps I write a blog about what I decide to do with that stock!
The point of this story is that I did homework and I listened to the advice of really smart people. However, the other lesson is that NO ONE can beat or predict the market. If anyone tells you otherwise, they have probably just been lucky.
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