2024-09-13 08:05:00 ET
Summary
- Picking individual stocks can outperform the market if you enjoy analyzing companies and have the discipline to manage your investments carefully.
- There are important lessons that investors need to follow if they are going to have success picking stocks.
- I share three of some of the most important lessons I have learned over the years that I wish I had known at the beginning of my stock-picking career.
As many of my regular readers know, I like to pick my own stocks rather than invest in broadly diversified ETFs and CEFs like the Schwab U.S. Dividend Equity ETF ( SCHD ) or the Cohen & Steers Quality Income Realty Fund ( RQI ). While funds certainly come with pros like providing instant diversification, reducing the need for time spent on research and tracking positions, and less risk of allowing emotions to get in the way of rational decision-making, there are also numerous pros to investing in individual stocks. This is particularly true if studying companies and analyzing stocks is something that you enjoy and/or do for a living, both of which apply to me. If you have the right temperament to be disciplined and patient while allocating your capital among individual companies, the rewards of picking individual stocks include the potential to significantly outperform the broader stock market, which also applies to me. I have been blessed to significantly outperform the S&P 500 ( SP500 ) over the years that I have invested my own money....
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For further details see:
What I Wish I Knew Before Becoming A Stock Picker
