Learning about the stock market

[quicksandfarmer]

The only thing you need to know about the stock market is, index fund or don't play.

True. There is some academic research that larger portfolios receive higher returns than smaller portfolios, which suggests that if you have a big enough pot of money the added returns from professional management outweigh the fees. The number I've read for the threshold is $50 million. So for the vast majority of people an index fund is better than a managed fund.

If you believe in efficient markets you'll believe that the price of an individual stock represents the consensus expectation of its future value. Buying individual stocks isn't investing, it's gambling.

 

[RickB]

True. There is some academic research that larger portfolios receive higher returns than smaller portfolios, which suggests that if you have a big enough pot of money the added returns from professional management outweigh the fees. The number I've read for the threshold is $50 million. So for the vast majority of people an index fund is better than a managed fund.

If you believe in efficient markets you'll believe that the price of an individual stock represents the consensus expectation of its future value. Buying individual stocks isn't investing, it's gambling.

Index funds would not exist if there’s were no investments in the underlying securities. Index and actively managed funds as well as stocks will always have a place in my portfolio.

 

[Diggin It]

I know there was a more recent thread, but I can't find it now.

I don't really understand why the markets are rebounding now. Things are opening which is good, but none of the revenue reports are in that will show all the losses.

 

[two_bit_score]

The markets can see through the bulls**t. The Corona virus lock down is seen as a fraud that has played out and is for all practical purposes over. Trump is taking strong measures to restore order where needed and that inspires confidence. Soros and the Democrats will throw something else out there soon but after November things will really be good in the second Trump economy.

 

[KennyG]

Right now, people who bailed out are trying to get back in before the recovery takes hold. Are they right? Who knows? That's what risk is all about. Those of us who never got out are sitting back and watching.

 

[two_bit_score]

And buying.

 

[Diggin It]

Those of us who never got out are sitting back and watching.

My 401K type plan is one for federal employees. I left it alone, made no changes. I haven't looked at it in months though, so I have no idea where it is. I'll wait until the S&P (which my plan is supposed to emulate) gets back over 3350 before I look.

 

[Jstpssng]

When the country was shut down I increased my contributions. I have a goal for the end of each year and if markets don't work in my favor I have to do what I can to compensate. Now I've forgotten my password so can't log in and see how I'm doing... not a bad problem to have.

 

[MossRoad]

Can't lay off the politics, can you?