Ghost of Igloi wrote:
I don't disagree with your advice. Good general advice for most people. The attached article offers a different view, that I think is worth the read.
The big problem with that article right off the bat is that it says that if the bears are right twice a day then the bulls are wrong twice a day. That gives the impression that there's a zero gain (or zero loss), and that is far from true. The fact is that 73% of calendar years are UP years and the overall trend is ALWAYS up over time.
Also, if you employ my philosophy, you don't have to care what the market does over a short (and that could be a few years even) period of time.
If you want to play with individual stocks, you should do this:
1) Be 100% debt free including owning a home outright or having enough money set aside ONLY for housing that will cover you the rest of your life.
2) have emergency fund of 3-6 months of expenses.
3) If working, still putting 15% or more into retirement vehicles made up of mutual funds.
4) Now, when you buy stocks, you should buy a MINIMUM of 5, and they should all be in different sectors of the market, mostly evenly distributed. Can buy more than 5, but the goal should be to not have more than ~20% in any one sector.