What I learned over the years is that you will almost never be 100% right on everything. In terms of investing, you can still make money if you are 50% right all the time. At the end of the day, it’s really all about managing risks, reaping returns and managing cash flow. If you are new to the financial market or if you just want stable growth, stick with index funds that track large US indices like S&P 500 or one of those major non-index fund mutual funds offered by one of the big three US asset manager/brokerage firms. In fact, I believe everyone should have some of these as their portfolio baseline. Picking individual stocks/ETF as well as dabbling in derivatives like options and futures, OTC/Pink Sheets penny stocks and playing with margins etc should be left to the professionals. For one thing, the information gap is huge let alone knowledge and experience gap. You might not even have access to level 2 and level 3 data never mind a certain “terminal.” Heck you might not even have access or know how to do ALCO interest rate sensitivity, duration and gap analysis. You also may not know about the Money Desk to manage cash flow by matching borrowing and invest/loan while keeping a safe amount of liquidity. The US has the best and most stable financial system bar none. At a relatively low-risk return of approximately 10%+ annual returns on equity, which I personally consider it as risk-free plus and too big to fail, I am not a big fan of expend money to buy treasury/debt versus large/mega cap investments via mutual funds. All the extracurricular activities around beating the market to get an extra 5% or whatever like a blank comparing contest is meaningless for the regular person who gets maybe max $100 a year extra minus the fees that is if his or her portfolio is even large enough to participate in that fund/program and having to put up with all the potential snobby bulls*** and p****** scams. Even it reverses to the mean or way below due to aggressive tactics from these funds/programs or can’t get money out, that could create a huge issue for the regular person.
I personally would just stick with the index funds or non-index funds offered by the big three US asset management/brokerage firms via Roth IRA or 401(k) where the government already designed these tax advantages for everyone who qualify. Look, I get it. In the US there is no debtors’ prison and people can declare personal bankruptcies and could recover a few years later. There are also plenty of social safety nets. Americans also view these people at the most relatively neutral or an antihero while a large number of people actually admire these people’s boldness and believe they will eventually succeed through trials and tribulations. The flip side is opportunity cost and whether these kind of risks are actually commiserate with its potential returns. Moral of the story, keep it simple especially when this game is knee-deep. If you work marginally hard with marginally ambitions and follow the beaten path in investment strategy like 401(k) and Roth IRA via mutual funds from a US-based big three asset management/broker, the safety net and the financial system will ensure you have at least a modest life with a decent retirement nest egg. It’s usually the simple things that if one does consistently well that provide the meat and butter in the long-run. You know what the funny thing is. Even when you are picking stocks that may grow faster than the market returns, your returns in the short-term will likely be based on whether the expectations which are somewhat based on whether earnings guidance from management meets the expectation of the influential institutional investors who are usually the bellwether with dedicated analysts covering that equity recommending a buy, sell or hold pacing market sentiments/expectations for the rest.
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Here is what I wrote previously regarding this and similar topic(s).
“I am going to provide a piece of strategy that very few people in the history of this world likely will ever be able to verify. When you have multiple degrees from top ten global universities, worked for nearly 100 Fortune 500 companies in one capacity or another, have numerous professional certificates and licenses, have leadership experience, an internationalist who have seen it all, you rarely have to prove to anyone at all your abilities. For the regular person, it’s all about managing expectation of everyone around you. What is important here is, keep in mind, you will likely only work for around 40 years in your life. This sounds a lot but it really isn’t. Make sure you always have FU money to say no to things that will not be advantageous to you. I think the easiest way to accumulate savings for a regular employee is not through savings in the traditional sense, it’s actually through 401K. Many employers will match a percentage of employee contributions and there are quite a bit of tax benefit with contributions for the contributing employee. In today’s day and age, jumping around a bit is one of the best ways to get career advancement if you are good at controlling the length of employment just long enough to not be considered a job hopper and not long enough to be considered an overstayer. In this day and age, an employment length of six months or a year is not that frowned upon anymore if you have a good reason for it and you don’t do this for every single job. Most people escape bad managers or dead-end jobs but obviously that is not what many future potential employers want to hear.
Most people don’t get rich from working for other people. Some people will point to the highest paying major professionals like doctors And to say medical doctors are rich. While doctors on average make a great salary on average at around $400K a year, most doctors also have to go through 10+ years of post high school education and become doctors if they qualify after meeting various rigorous criteria in their 30s. Most doctors also have 300K or more in debt before they even become doctors. If one were able to work the approximate ten years during or after college and save that money in a 401(k), just based on market appreciation, an annual total 20K contribution (including contribution from the employer) at average calculated market growth of around 10% growth in 15 years will be $600K+. It also comes with tax advantages which I will not discuss at this time. An HSA for those who qualify in addition to a 401(k) for those who qualify could potentially be even more tax advantaged. Anyway, by the time the doctor pays off his or her debt, the non-doctor already has likely $600K+ in retirement account savings than the doctor has. Because there is a limit in tax advantages 401(k) annual contributions by a person while working for an employer, the doctor can not simply catch-up in 401(k) savings the regular way (unless we are talking about catch-ups exceptions at certain age) by throwing money at it. What this means is even if the non-doctor does not contribute anymore to a 401(k) plan after they saved $600K+ in 401(k) their money will grow to at least a few millions after 30 years more than enough to live comfortably in retirement. Ultimately, neither of these above methods will help one get truly do whatever you want wealthy.”