Retail Investors Are Long Confidence And Short Experience

The biggest problem for most young investors is the lack of research on the stocks they buy. They are only buying them “because they were going up.”

However, as Jason notes, when the “season does change,” the “fundamentals” will matter, and they tend to matter a lot. Such is something that most won’t learn from “social media” influencers.

 

A Man With Experience

There is an old WallStreet axiom which states:

“A man with money meets a man with experience. The man with the experience leaves with the money, while the man with money leaves with experience.”

Such is the truth about markets and investing.

Experience tends to be a brutal teacher, but it is only through experience that we learn how to build wealth successfully over the long-term.

As Ray Dalio once quipped:

“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.”

Such is why every great investor in history, in different forms, has one basic investing rule in common:

“Don’t lose money.” 

The reason is simple; if you lose your capital, you are out of the game.

Many young investors will eventually gain a lot of experience by giving most of their money away to those with experience.

It is one of the oldest stories on Wall Street.

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