Quote:
Originally Posted by jIM_Ohio
I am always shocked at the people here which always recomend to avoid stocks, avoid company stock, or sell a holding simply because it does not suit their own risk tolerance.
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I suppose that's me.
To be sure, I agree that risk tolerance is a factor that individual investors have to determine for themselves. But it's not the only factor to consider. (And for the record, I don't project my own risk tolerance towards others.... Though technically, if I did, everyone would be stock trading.
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Other factors include the individual's skill level and willingness to put forth the time and effort for such endeavors. To me, stock picking and trading is fairly deep end stuff. Even if it's not day trading, it really helps to have the basics down pat first, your financial house in order, and to approach it incrementally from a properly-allocated and diversified portfolio first.
So, when people ask questions like, "Should I buy or sell this?", it gives me the impression that they don't have their basics down pat. Because, if they do, then they wouldn't have to ask such a question. Better yet, they would also realize that such a question is one of those trick questions with no good answers. Because it "Just Depends" relative to their portfolio, risk tolerance, and investment style.
In fact, I don't think what to pick is even anywhere near as important as how to pick it!
So, that's why I end up constantly advising to avoid stock picking....
Now, if someone were to come up and ask, "What are the conditions that would be appropriate for someone to be stock trading?" then I would have responded differently. Rather than simply saying, "Don't do it", we could go into details about the circumstances that I think would be appropriate to do so. But no one has yet to ask that kind of question.