
Ask HN: Advice for young stock investor? - a_lifters_life
How did you start out investing in stocks? How did it pan out for you?<p>-one young investor
======
smt88
Do you enjoy gambling? As in, do you enjoy games of pure chance where you
could lose your money? If not, don't invest in stocks. No one beats the
market. Put your extra money into index funds with low fees if you want
something safe. If you want something riskier with better upside (where skill
is actually involved), try something like urban real estate. Obviously you
still have to know what you're doing, but there are opportunities for people
with enough to buy places in cash.

In short: do not do this.

Further reading:

[http://cashcowcouple.com/investing/stock-picking-always-
losi...](http://cashcowcouple.com/investing/stock-picking-always-losing-game/)

Key passage:

> _Professionals Can’t Pick Winners

> The New York Times article, “The Prescient are Few” (1) offers a great look
> at the study (2) by Professors Laurent Barras, Olivier Scaillet and Russell
> Wermers about the performance of 2,076 professional mutual fund managers
> over a 32-year time period.

> The result are what I’d expect. They found that from 1975 to 2006, 99.4% of
> these managers displayed no evidence of genuine stock picking skill, and the
> 0.6% of managers who did outperform the index were “statistically
> indistinguishable from zero.”

> Professor Wermers goes on, “This doesn’t mean that no mutual funds have
> beaten the market in recent years. Some have done so repeatedly over periods
> as short as a year or two. But the number of funds that have beaten the
> market over their entire histories is so small that the False Discovery Rate
> test can’t eliminate the possibility that the few that did were merely false
> positives”_

Also:

[https://blogs.cfainstitute.org/investor/2014/11/06/mission-i...](https://blogs.cfainstitute.org/investor/2014/11/06/mission-
impossible-beating-the-market-forever/)

[https://www.biggerpockets.com/renewsblog/2015/04/16/ridiculo...](https://www.biggerpockets.com/renewsblog/2015/04/16/ridiculousness-
of-stock-picking-waste-of-time-young-investors/)

[http://www.forbes.com/sites/rickferri/2012/03/12/why-
smart-p...](http://www.forbes.com/sites/rickferri/2012/03/12/why-smart-people-
fail-to-beat-the-market/)

