Quit wasting your time researching stocks and attempting to be an analyst. No one cares that you majored in finance, economics, or accounting. Ears bleed these words are spoken, “I actually enjoy doing research and picking my own stocks,” Oh… So you enjoy losing and being old-fashioned? I’m sure people enjoy writing letters but it’s inefficient and there are better ways to communicate nowadays.
Only 10% of trades are based on fundamental analysis. Fundamental analysis is analyzing financial statements, market conditions, and economic factors to determine a company’s value. Basically, hoping to find out that a stock is undervalued or overvalued and using that information for profit. Only 10% of trades are being based off of this! That means the large majority are being traded based on algorithms, high-frequency trading, and quant analysis. Long story short, expensive, ultra-powerful computers are making the trades and they are quicker than you and can work through a hell of a lot more information than you can.
This isn’t a cry for you to not invest in the market – far from it. I want people to invest, but don’t try and be something you’re not. With advancements in technology and the speed that information is accessed and processed, markets are becoming more efficient. As markets become more efficient, fundamental analysis will prove less and less relevant and passive index investing will prevail.
If you’re looking for some help, or want someone to confirm that you’re 100% on the right track, then check us out at TruWealth Planning and schedule a free intro consultation.