Quote:
Originally Posted by l2ridehd
I always look for more then 8.5% to put my money at risk. I want a 15% annual return. And there are enough good companies whose stock is selling at a bargain to provide that. It takes some research and some work to identify them and to understand them, but the returns are worth the effort. I would rather own 4 or 5 really good stocks then some funds that spread them over 100's of stocks. Just my personal choice and not for everyone.
|
I couldn't agree more. I've always picked my own stocks (no mutual funds) and have been quite active in the market since the late 70s. I'm doing very well inspite of going through 3 market crashes! I took the biggest risk early on by only investing in 2 stocks. That worked out well and I went to 6. Presently, I own stock in nine companies.
It's been great but I never take the market for granted. The secret, at least for me, is to live way below my means. I don't spend a lot of money just because I have it to spend. For all I know, I might live to be 100 or 115 and I don't want to run out of money. Who knows what inflation will do to the value of our retirement savings down the road. So it's better to play it safe and end up with too much, rather than too little.
Many advisors talk about saving up a retirement nest egg and then slowly spending it down. That sounds like a sad state of affairs to me. Although, I suppose most people don't have any choice. But if people would learn how to invest wisely, they might be able to live below their investment income and therefore continue to increase their net worth during their retirement years. But, as you have said, it's not for everyone.
