Thoughts On Creating Your Own Portfolio

Some thoughts:

• Where are people getting the stats on what percentage of people beat the SP500? What study has access to everyone's accounts and trading history to make these claims? This is just repeated over and over.
• There is a lot of misinformation out there about investing, that you cannot do it yourself and you must pay someone else to do it for you.
• A fund is a basket of individual stocks, your portfolio is a basket of individual stocks.
• Look at the price chart of a stock before you even start researching it. Is the stock losing value every year or is the chart all over the place. Most likely it will keep doing that. Why waste your time with those when there are stocks where the value has been increasing for decades.
• In general individuals would do a lot better avoiding unprofitable companies. You in fact buying a stake in the ownership in a company when you buy the stock. If individuals thought more about ownership they would realize a profitable company makes more sense than an unprofitable one in terms of the future.
• Building your own portfolio does not mean you have to have high turnover in your stocks.
• If you have a losing stock, its weighting will decrease while the winning stocks weighting will increase. Thus a losing stock has a lesser and lesser impact over time.
• You are allowed to add and remove stocks from your portfolio just like the SP500 committee adds and removes stocks.
• You can build a portfolio that captures more upside than the SP500 and captures similar or less downside of the SP500. Basically you are sampling the SP500.
• The SP500 is actively managed by S&P Global.
• Ignorance about stock market investing is very expensive.
• Past Performance Is Not Indicative Of Future Results, then how do people make projections on investing in the SP500 for long periods of time?
• People will say but you cannot beat the market for 30 years. Someone does not need to invest for 30 years, you can hit your financial goal much earlier and do something else afterwards.
• You do not have to beat the SP500 every year to do better than the SP500. You calculate the average of each year over at least a 5 year period then compare. I see people quit their plan because in the short term, the beginning, they may be underperforming.
• When people say that the failed at stock picking and to not do it, they don't list what the stocks were. A lot of the time if they ever reveal it, it is an unprofitable or struggling company with a price chart that has been descending for years.
• There are plenty of outperforming stocks within the SP500 but their weightings are so small, 0.1% in some cases, that they barely make a difference.
• If you can separate your feelings from investing you will do a lot better.
• If you know your statistics about the stock market you will do a lot better. Really just know the principles of basic statistics in general.
• People who say it is a waste of time researching companies and other investing relating activities because your time is best used elsewhere. Yet we go to school, some take out massive student loans, to learn for the purpose of getting a job to make money. Learning about investing and applying it is way easier than the effort you have to put in at work.