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Originally Posted by Fern
I think it's possible thru sheer randomly decent luck to pick decent stocks about half the time, i'm talking individual equities, not mutual funds, but the other half the time you do poorly because it's impossible to anticipate every catastrophe that could send a stock pick tanking.
Like who would ever think that a reputable company like Bausch & Lomb would be so gravely damaged by the eye fungus in their contact lens saline solution?
I think individual stock picking is best limited to the industry(ies) you know intimately well, due to your career or for other reasons, but that you should stick with mutual funds for the vast bulk of your portfolio. Most people don't have the time to not just do the initial research needed to purchase the stock, but to monitor it on a continuing basis as well.
They've done studies showing that while guys tend to like buying stocks more than women, who buy more mutual funds, the women do just as well over the long run.
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I think you can pick stocks well, but it does require research, thought, and evaluation of your risk level. People who randomly buy on a whim, or because Kiplinger said the stocks did well last year (oops, too late) have problems. Not as risky as commodities, but you have to keep focus.