Index Funds or Individual Stocks? This is a question many beginners struggle to answer when looking to get started in the markets. If you’re looking to invest in the stock market it is important to define your strategy from the beginning, and a key component of your strategy will be whether or not you want to invest in individual businesses.
In this video I talk about the ONE key reason why I (and you) should be investing the majority of our money into individual stocks. I explain what exactly index funds are, and provide an example of a life time portfolio investing in the US or Australian markets.
I then compare this with two other examples which demonstrate why individual stock picking is clearly superior if you are willing to put in the work.
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Disclaimer: The information & opinions in these videos are strictly for educational & entertainment purposes ONLY. None of the opinions discussed should be taken as financial advice as I am NOT a financial advisor. Please do your own research & consult a financial advisor.
A web series inspired by the subreddit Explain Like I’m Five. http://www.reddit.com/r/explainlikeimfive/
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The Explain Like I’m Five subreddit is an inclusive place to ask questions and get layman-friendly answers, without fear of judgement. Appropriate for questions about current events, history, politics, culture and more. http://www.reddit.com/r/explainlikeimfive/
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Hosts: Michael Kayne and Langan Kingsley
Kids: Christian Cespedes, Dylan Ryley, Gabriella Stein, Santino D’Amico, Madeline Russell
Written and directed by Jared Neumark
Produced by Dan De Lorenzo
Shot by Alonso Homs
Music by Sean Hannigan
Intro Jingle by Doug Widdick Video Rating: / 5
Known for being able to teach anyone to trade in 60 minutes or less, Markus Heitkotter with Rockwell Trading has taught over 360,000 traders worldwide and has appeared on CBS, FOX, NBC, ABC and more. Markus is on a mission to prove how simple trading really is so that you too can travel the world and live the lifestyle you always dreamed about.
Attend my LIVE training:
https://www.google.com/podcasts?feed=aHR0cHM6Ly9hbmNob3IuZm0vcy84ZWJhZjBjL3BvZGNhc3QvcnNz Video Rating: / 5
In this video, learn about the five biggest mistakes that investors make when buying ETFs, or exchange-traded funds. To learn the basics about ETFs, visit https://www.fidelity.com/learning-center/investment-products/etf/overview.
To get started investing with ETFs, visit https://www.fidelity.com/etfs/overview
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Let’s talk about the five biggest mistakes investors can make when buying exchange-traded funds. ETFs can be good tools for investors – when used appropriately. But with any investment, there are always things to watch out for.
Number 1: Buying the Hot New Thing
More than 100 new ETF products launch each year, many of them chasing the latest hot trend. Cloud computing, driverless cars, 3-D printing … you name it, there’s an ETF for that.
Buying into the latest hot theme might make you big returns, but take care: These product launches may come after there has been a run up in the market. Buying at the top can be painful on the way down.
Number 2: Buying Something You Don’t Understand
The only thing worse than chasing the hottest trend is buying something you don’t understand. ETFs have taken institutional strategies and made them push-button-easy for everyday investors to access. Want access to commodity futures? There’s an ETF for that. 300% leverage? 200% short? Interest-rate carry plays? Yes to all. But just because you can buy something easily doesn’t mean you should. All of these funds may be good tools, but only if you know how to use them correctly.
Number 3: Thinking All ETFs Are Created Equal
Consider China. At the start of 2014, there were more than a dozen broad-based China ETFs. For example, had you chosen PGJ, the PowerShares Golden Dragon China ETF, at the start of the year, you would have lost more than 7% of your money. Had you instead chosen ASHR, the Deutsche Xtrackers Harvest CSI 300 China A-Shares ETF, you would have earned a 51% return. Both are “China ETFs.” Both can provide big, diversified portfolios. But ASHR has significant exposure to Chinese Ashares—largely consumer-focused stocks listed and traded on the domestic Chinese market— which performed spectacularly well in 2014. Don’t assume all ETFs are created equal. Just because two ETFs cover the same market doesn’t mean they provide the same exposure or returns.
There’s no guarantee which fund will perform better in the future. But if you wanted to invest last year in the growth of the Chinese consumer and the domestic investor base there, a little bit of research would have gone a long way.
Number 4: Trading…Just Because You Can
Trading is central to ETFs. It’s right there in the name. But just because you can trade an ETF intraday doesn’t mean you should. Emotions are often an investor’s worst enemy. You zig when you should zag; you sell at the bottom and buy at the top. We all do sometimes. The trouble is ETFs make that even easier than traditional mutual funds. ETFs’ intraday liquidity can be great when you need to get into or out of the market quickly. But those situations are rare.
Number 5: Only Using Market Orders
When you do invest, consider using a limit order versus a market order. Market orders are instructions to buy or sell securities at the best possible price right now. That can work well for the most liquid ETFs, but as you move beyond the top dozen ETFs, you can find yourself getting trades executed at prices you don’t really want. Using a limit order means you agree to buy an ETF at a certain price or below, and sell it at a certain price or above. A limit order puts the control back in your hands and can help you set the price on your terms. Learn from these common mistakes to help avoid making them yourself.
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In many instances, the terms „trading“ and „investing“ are used interchangeably; however, this can lead new people down the wrong pathways of learning. I discuss the major differences between the two strategies of making money in the stock market.
Free Guide – The 5 Tools I Use To Find Stocks To Trade: https://claytrader.com/lp/Free-Guide-Trading-Tools/?utm_source=social&utm_medium=youtube&utm_campaign=resource%20guide
Enjoy this Free Content? I’m confident you’d enjoy my premium training courses then: https://claytrader.com/training/
Hear real life trading journeys from „normal“ people: The Stock Trading Reality Podcast – https://claytrader.com/podcast/
A Linear Programming formulation of an Investment/Portfolio selection Problem:
No single investment alternative should account for more than 40% of budget.
Amount invested in Gold and Real Estate combined must be at least twice that invested in Petroleum.
The risk associated with Stocks should not exceed twice the risk associated with Real Estate.
Investment in real estate should exceed investment in Stocks by no more than M.
Average risk factor should be no more than 5. Video Rating: / 5
In this video we talk about stock market investing vs 401k plans. The key points that we hit on are…
Fees within the 401k.
Control over your money.
What will give you the best return on investment.
Employers matching your deposits into the 401k
What if you want to change jobs/locations etc.?
What if you want autonomous investments?
How simply having a 401k can help you control your spending and force you to be smart with your money
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