Is it really worth it to invest in individual stocks?

[ERD50]

Not familiar with Dalbar studies so I'm puzzled by your statement. I'm pretty sure my holdings in VOO capture 99+% of the S&P 500's total return year after year. ....

I had an idea what he was refering to, but here is from a quick search:

https://www.dalbar.com/Portals/dalbar/Cache/News/PressReleases/QAIB2024_PR.pdf

Basically, it says the average investor doesn't buy & hold, and tends to sell low, buy high. Though I'm not sure if that study really can distinguish between people trading in the market, or is some of it a need to free up some cash during bad times, so they sell some stock at a point that coincides with a lower point in the market? And buying high might be influenced by them having the cash to do so at that time as well (company gives out a bonus?, their personal business is booming?, etc).

 

[Montecfo]

Dalbar does fund flow studies and has for 20-30 years. They use those to understand average investor timing of buys and sells.

Long story short, average investors buy high and sell low.

Let's not be average.

Not familiar with Dalbar studies so I'm puzzled by your statement. I'm pretty sure my holdings in VOO capture 99+% of the S&P 500's total return year after year.

But, of course, I'm a buy and hold guy, not one of those market timers you hear about...

 

[TheWizard]

Dalbar does fund flow studies and has for 20-30 years. They use those to understand average investor timing of buys and sells.

Long story short, average investors buy high and sell low.

Let's not be average.

Yes, that makes sense...

 

[FiveDriver]

I own only one individual stock.

Way back in 1981, my future MIL gifted me a single share of IBM for Christmas. I cherished that share as it was her Stamp of Approval on my dating her Dear Daughter. That single share was also a large percentage of my overall Net Worth at that time......Heh-Heh

Over the intervening years, with a few stock splits and reinvested dividends, that holding has grown to well over $70K. I call it my Long Term Care Policy -- it should buy me a year or two of Assisted Living which is probably about all I could stand anyhow.

I let the Pros pick the stocks and I invest in their low-cost ETF's.

 

[Gumby]

There was a time in my life when I had more interest in picking stocks, and I generally picked some good ones. More than once, one of the companies I held stock in was subsequently bought out by Warren Buffet. But I simply lost interest in doing the research and keeping track of my investments. Now, I am down to one individual stock (MO) that pays a regular and large qualified dividend into my taxable account. The rest is largely in two balanced mutual funds (VWENX and OAYBX), VIIIX and a Treasury ladder. I would probably have it all in VWENX and the Treasury ladder, but I haven't consolidated my 457 and 401k into my tIRA yet.