I feel due to daily grind of the job I am not able to focus on being the best investor I can be especially while investing in direct stocks. Mutual funds are sort of on auto-pilot so no issues there. I have very good sense of macro economics, economic cycles, latest trends, etc. but I lack the speed and assertiveness of being a stock picker. People who have FIREd or achieved financial freedom; do you think you have become a better fundamental investor due to sheer amount of time available with you? And are you able to take short term tactical calls with required speed and clarity?(one example being rise of silver, I knew that beforehand due to chinese restrictions and uncertainity, it will rise but never acted on it thinking let me read on it on a weekend)
Improved as fundamental investor after FIRE?
byu/Heavy_Luck_6085 infinancialindependence
Posted by Heavy_Luck_6085
4 Comments
This is what I think – The great preponderance of money moving around the world in short-term bets and trades is happening due to giant institutional investors, hedge funds, quants, advanced algorithms, and investors who carry the power to effect change in the the companies they invest in. These trading partners have crazy advantages – near-instant access to information, computing power, armies of analysts who work full-time+ on this, financial capital, etc.
I have a friend who works for a hedge fund and notes that it matters how close you are physically to stock exchanges, since the fractions of a millisecond in transmission time can make a difference. He also notes that he would much rather invest in index funds in his personal investments rather than compete against the big boys.
If you’re trading and making bets, you’re mostly likely trading against these. Do I think that just because I have more time to educate myself, I should be able to gain a healthy alpha against the institutional investors? Nope. Much rather spend my time and effort elsewhere.
Even the people do it as a full time job have a hard time beating the market, and usually fail.
I have zero expectation to start gambling my money into individual picks when a *VFIAX and chill* strategy was the very thing to get me to FI!
Why fix what’s working?
Investing isn’t a zero-sum game but short-term speculation is. To profit consistently you don’t just have to be competent, you have to be better than everyone else. You’re trading against institutions with armies of math, finance, and CS PhDs, nearly unlimited capital, willingness to lose nine figures if they’re wrong, and the personal phone number of someone on the Federal Reserve Board of Governors. They know all the macroeconomics and trends that you do. How are you going to win?
If you were well versed in economics you would know they gave out a Nobel prize for efficient markets
Even if someone COULD beat the market, who do you think it will be? You, retired random dude reading about stuff on the internet? Or some guy at Goldam Sachs with 30 years of experience investing in the field, an army of Harvard educated analysts working 15 hour days and access to every paid industry report out there? Cause that’s who is on the other side of your trades