Whooping the Market
When I was younger, I thought I was smart enough to beat the market. I didn’t want to invest in those boring index funds, I wanted to make a killing instead. Why should I settle for an 8% return if I could get 30%? I figured since I was a doctor, I was probably smarter than average. If I was smarter than average, I should be able to study what others are saying about the financial market and beat it by picking winners. So I subscribed to several investment magazines and newsletters and did my research. I bought the things that seemed to be ripe for the picking and sold when I thought they had hit the top. I was investing several hours a week on my research and stock trading to speed up the arrival of my financial independence.
One day I decided to calculate just how good I was doing, to prove the time I invested was well worth it. My wife and I each had an IRA account with thousands of options to invest in and that is where I was doing all the trading. This also meant my stellar profits were not being taxed with each trade. I also had a 403(b) account that only offered about eight mutual fund choices to invest in. Because the choices were so limited in that account, I just picked two mutual funds and I never paid any attention to it. That account made for a good control group to contrast with my stellar stock picking results.
If you would like to find out how it turned out, you can go to the link below to read the full article published in The White Coat Investor’s blog. It was nice of him to let me tell my story. I hope you like it.
Come back here an leave a comment on your adventures in learning to pick stocks.