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Why I don’t trade stocks

May 5th, 2009 · 2 Comments

I hold my hard-earned money in index funds, money market fund, CD and saving accounts. I don’t trade stocks because

  • I don’t have interest/passion in tracking individual stocks. I’d rather spend time doing other things I enjoy doing.
  • I want to have a good night of sleep every night. I don’t want to spend time worrying about my investment.
  • In my opinion, stock trading doesn’t create any real value. I want to become wealthy by creating real values. I believe that one major cause of our current financial mess is that we’ve too many bankers, and too few builders. I like to succeed the old fashion way by working hard, working smart, helping others, and creating values.
  • I believe stock market is NOT efficient. Some people have information advantage over others.
  • I understand that it’s very hard to beat the market if I have to pay extra fees to personal financial advisors and fund managements.
  • I agree with Mark Cuban — Stock Market is for Suckers.
  • I respect and admire John Bogle. I believe in his philosophy of index investing. Following his advice in The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits), The Bogleheads’ Guide to Investing, and Enough: True Measures of Money, Business, and Life, I earned positive returns for my 401K in 2008 while most people I know lost 40% or more in their 401K accounts.

Tags: 401K and Money Market · Beat Recession · Personal Finance

2 responses so far ↓

  • 1 Vishal NYC // Jun 15, 2009 at 4:39 pm

    I don't believe enough arbitrage exists in equity trading that makes the market not efficient. And even if it did, the price of the market would eventually level out to zero economic profit / no arbitrage.

    Markets are highly driven by speculation. It is hard to predict speculation since you cannot accurately predict the future.

  • 2 Vishal NYC // Jun 15, 2009 at 8:39 pm

    I don't believe enough arbitrage exists in equity trading that makes the market not efficient. And even if it did, the price of the market would eventually level out to zero economic profit / no arbitrage.

    Markets are highly driven by speculation. It is hard to predict speculation since you cannot accurately predict the future.

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