Single Stocks – A Monkey Can Invest Better Than Experts

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Tad’s on twitter he said would you say it’s okay for someone to invest in single stocks after baby step 6 and while also maxing out 15% in the mutual funds well i tell folks not to put more than 10% of their total nest egg in single stocks because single stocks are risky they’re more risky than mutual funds by far and i personally don’t own one single share of

Single stocks not one and here’s why the average guy buying and selling single stocks several studies backing this up so you decide you’re going to read the paper you’re going to watch bloomberg or whatever you’re going to do and you’re now dadgum stock expert with your golfing buddy and you’re going to buy and sell single stocks and you got a stock tip and

You’re reading about this and you’re tracking that and you think you’ve got an edge the guy doing that it’s almost always guys by the way some reason ladies are smarter than to do that but guys will try that stuff and the average guy doing that makes about 7% on his money lots of studies indicating that in other words you suck at it because if you would put that

Same amount of money in an s&p 500 no load growth stock mutual fund you would have made what the market makes which is 11 and a half or 12 over time and so you’re not kind of you know you don’t beat the market another study that was kind of humorous they put all the stocks on the new york stock exchange on the wall you know each of the they were just printed

Them out and put them up on the wall and the names not the actual shares of stock and they got a monkey and they blindfolded the monkey and they gave the monkey darts and they somehow convinced the monkey the blindfolded monkey to throw the darts and stick them in the wall wherever the dart hit that became the stock in this hypothetical study that they would buy

And hold for the next two years and so they built a portfolio by the blindfolded monkey with darts then they brought in master portfolio managers and individuals who thought they were stock experts and told them to pick their best poor possible portfolio of single stocks now here’s the thing they didn’t really use a portfolio they said any single stock you pick

One stock you do you know these shows where they tell you about one stock and you okay that company what about this company bulls are bears right i’m i’m bullish or i’m bearish on that particular company i like this company so the blindfolded monkey picks a single stock with a single dart that sticks in the wall then they bring in the best guys in the business who

Really do know what they’re doing but they were limited to only picking one stock the blindfolded monkey over a two-year period of time beat 90% of the experts is that because as experts are not as smart as a blindfolded monkey no that’s not the point the point is a single stock is so much risk and you just don’t know and they do is an unfair test to the experts

Knowledge because the experts were limited to one single stock where the experts allowed to build an actual portfolio of 25 or 30 or 50 stocks they would have outperformed a random pick by blended folded monkey of a portfolio because they do know what they’re doing a lot more than you and your golf anybody do but when you play a single stock you’re nothing better

Than a blindfolded monkey that’s the point so i just don’t do it it’s that that’s the numbers and that’s all the actual probability lands and the chances of you making money and all that stuff and so it’s a bad hobby is what it is day traders you remember when day trading was a big deal a few years ago now here’s the numbers on day trading 92 percent of the day

Traders lose money that’s all of them you have a better shot at the slot machine in a cheap saloon in vegas than you do day trading statistically mathematically i mean it’s just it’s just plain straight-up stupid is what it is so having said all that did if you want to play it because you just can’t stand it then don’t put more than ten percent of your net worth

In a single single stock and in single stocks because you’re not going to keep up with the market on average you’re not going to do it and if you do it’s a fishing story it’s the one time you went fishing in the one time you caught a big fish and the bottom line is is that over the scope of your life the fishing story does not indicate that one time that you are

A great fisherman it just means one time you caught a big fish that’s all it means hey guys thanks for watching if you enjoyed this video click the subscribe button to get the latest content and check out these other great clips from the show so you have to break the cycle you have to flip this thing on its head and make it behave you’ve got to get so fired up and

Wired up that you’re broke friends think you’ve lost your mind oh

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Single Stocks – A Monkey Can Invest Better Than Experts By The Ramsey Show – Highlights