90% of people who trade actively eventually loses money


#1

do u agree or disagree? why?

https://www.quora.com/Do-90-of-day-traders-lose-money


#2

Can’t disagree with stats. But interesting to note that the stat is a bit misleading:

  • It includes the guy who makes one big stupid investment, loses a lot and then decides to park in index fund
  • It includes the guy who made many small wins over his career, got greedy and made one bad call
  • It also includes the guy who, in the opposite sense, started out with a huge mistake but then adjusted his strategy and did better but hasn’t yet overcome his losses

I think after adjusting for that, the number will be quite a bit lower than 90%. However, at the end of the day, we all know that beating the market consistently is a big, big ask. The idea is to keep losses small and wins big.


#3

Over time, value of equities should increase. This is expected if you look at index and invest in it. But you buy individual company shares, it may not be the case. We have seen many high flying companies collapse … Noble is a good example. So I tend to buy index ETFs to keep and accumulate while I trade with individual company’s shares

Hope it helps

Warriortan


#4

Interesting. Would you consider REIT as some form of ETFs then? (While it is a group of properties, it is managed by one company)


#5

I won’t consider Reits as ETF because the portfolio is not built based on a particular index. There are many management decision and discretion so much so that good investors should be able to differentiate between a great manager from a good manager.