Many investors bristle when I state that most individual investors should not buy individual stocks.  I recently was told by a reader of my blog, “You have taken a lot of the fun out of investing by pointing out the problems of buying individual stocks.  Owning index funds is boring.”

I have attempted to extinguish their dream.  They dream of buying the next Apple or Amazon when the companies are small and insignificant compared to what the companies and their stock prices will become in the future.  Someone who invested $5000 in Apple stock ten years ago would now have over $300,000 worth of stock, if he or she had not sold any along the way.  The Amazon investor would have about $63,000. Read the rest of this entry »

Volatility is one of the most misunderstood concepts in investing.  It is usually presented as something bad and to be avoided.  This is shortsighted, misleading, and efforts to reduce it can create more problems than solutions.  Investors should instead welcome and profit from the opportunities created by volatile markets. Read the rest of this entry »