Does Stock Picking Work?
Thursday, 18 February 2021
When you think of success stories like Tesla and Apple, it can be tempting to try your hand at individual stock picking. However, the risks outweigh the rewards. For every Tesla there is an Enron, and for every Apple there is a WorldCom. For stock picking to work, you have to make two well-timed decisions: when to buy and when to sell. The chances of getting both correct on a consistent basis are quite low. Over the past five years, over 30 percent of individual stocks lost money, compared to just 0.2 percent of mutual funds and ETFs. Investing in mutual funds and ETFs takes away the need to correctly time the buy and sell decisions, which is why these are our preferred investments at Flourish.
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