Face your fears; take the chance; this is ringing through my head. Whether worse case is more worse, it's better to take action to settle you mind than to regret to not have taken the chance.
I conduct fundamental analysis on those companies to decide which ones are worth the risk-reward.
I funnel all my money into those individual stocks for the next three years.
Best case:
My investments multiply and I’m able to retire early.
Worst case:
I lose a majority of my principal.
I’m set back three years of savings and compounding growth.
I have to work past the traditional retirement age.
Be sure to also apply a probability to each of these scenarios. The best and worst case of picking your own stocks are not a 50/50 probability. The probability of the worst case is much higher than 50%.
Not to say, don't do it. But you have to factor in probabilities to your analysis.
Thanks for that point, Ben. When considering taking any type of risk, understanding the probabilities of outcomes will affect your decision. So don't jump into an investment without considering all factors involved.
Face your fears; take the chance; this is ringing through my head. Whether worse case is more worse, it's better to take action to settle you mind than to regret to not have taken the chance.
A word of caution for this part:
Scenario B: Investing
I look for companies that have growth potential.
I conduct fundamental analysis on those companies to decide which ones are worth the risk-reward.
I funnel all my money into those individual stocks for the next three years.
Best case:
My investments multiply and I’m able to retire early.
Worst case:
I lose a majority of my principal.
I’m set back three years of savings and compounding growth.
I have to work past the traditional retirement age.
Be sure to also apply a probability to each of these scenarios. The best and worst case of picking your own stocks are not a 50/50 probability. The probability of the worst case is much higher than 50%.
Not to say, don't do it. But you have to factor in probabilities to your analysis.
Thanks for that point, Ben. When considering taking any type of risk, understanding the probabilities of outcomes will affect your decision. So don't jump into an investment without considering all factors involved.