Quote:
Originally Posted by Bill Bumface
I think recommending anyone pick their own stocks is dangerous. Just head over to reddit/wallstreetbets. Trading hits the same parts of our brains as gambling, and it's very challenging to manage the emotional parts of trading to save yourself from yourself.
I would actually recommend that no one get a trading account at all until they are sure they are ready for it. The best part of a managed account (robo or human) is it keeps your fingers out of the pie.
Not to say that no one should pick their own investments, I just wouldn't send someone down that path, especially someone without the time to make up for the mistakes that often come with that learning curve.
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Totally agree with Bill here.
***If*** you are going to trade some or all of your own portfolio, here are two suggestions that have served me well:
1) have a well-defined strategy that you're implementing. Personally I use a specific 'tactical asset allocation' strategy called 'growth trend timing' and there's virtually no room for emotions to play a role if I'm implementing it honestly. This is not a comment about the virtues of GTT, rather that I have to do the Ulysses thing and "tie myself to the mast" of a set strategy so I don't end up sinking the ship.
2) Have a performance metric that you use to track yourself. Personally I like the Sortino Ratio. My retirement fund is divided broadly into three parts, one of which is professionally managed. I use Sortino on all three. I have "fired myself" as manager of certain accounts (e.g. TFSA) after a couple longer stretches of relative underperformance measured using Sortino, handing them over to the pros instead. (I also changed professional managers once ~ten years ago on the same basis, tbf). Having said that, the above has allowed me to continue playing a role (I'd say "active" role but the activity has more to do with monitoring than transacting) in my own retirement funds while avoiding a repeat of some expensive lessons I learned back in ~2008 when I only had a small amount of money invested but I managed it all and succumbed to nearly every mistake you can make... especially letting emotion inform transaction decisions.