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THREAD: Why you should NOT buy Google, Facebook, GE, Exxon, or MTN stock.
Friends, colleagues, and family members often ask for my thoughts and opinions on individual stock.
Should I buy Facebook, it has grown by XYZ% in one year?
Uber's IPO seems like a great opportunity, should I buy it?
MTN will continue to dominate the market, should I buy it?
Should I buy Facebook, it has grown by XYZ% in one year?
Uber's IPO seems like a great opportunity, should I buy it?
MTN will continue to dominate the market, should I buy it?
My answer is almost always NO. Here's why?
1. Risk: All investments are risky. Putting a lot of money on any company is an unacceptable level of risk for smart investors because you don't control the company and cannot predict the future.
E.g. Google was great until last week when US congress started anti-trust talks.
E.g. Google was great until last week when US congress started anti-trust talks.
2. Eggs and baskets: Putting all your eggs in a single basket is a bad idea. How can you predict the effects of micro or macro economic factors on a single company?
You can't. It's always better to diversify.
E.g. Enron couldn't fail until it did.
You can't. It's always better to diversify.
E.g. Enron couldn't fail until it did.
3. Returns: Professional stock pickers mostly under-perform index and mutual funds. Even the best of the best who wake up in the morning and ONLY think about the stock market don't consistently make better returns than a diversified portfolio.
thestreet.com/story/10032955…
thestreet.com/story/10032955…
4. Finally, Most people don't have:
a) The skills to select the best individual stock.
b) The time to do the research required.
c) The psychic ability to predict the future.
a) The skills to select the best individual stock.
b) The time to do the research required.
c) The psychic ability to predict the future.
That's why my answer to "should I buy XYX stock" is almost always NO.
Instead, buy.
1) A diversified mutual fund.
2) An index fund.
3) A money market fund.
Instead, buy.
1) A diversified mutual fund.
2) An index fund.
3) A money market fund.
How do I invests in these instruments if my bank doesn't even understand them?
I know many people don't have access to safe investments so I have been thinking about starting an international investment fund to bridge the gap between financial literacy and investment decisions.
I know many people don't have access to safe investments so I have been thinking about starting an international investment fund to bridge the gap between financial literacy and investment decisions.
I am still gauging interests before making a final decision.
Please send an email to investwithtayo@gmail.com to let me know if you could potentially be interested in an international investment fund with a "safety first" conservative philosophy.
Thanks.
Please send an email to investwithtayo@gmail.com to let me know if you could potentially be interested in an international investment fund with a "safety first" conservative philosophy.
Thanks.
