![]() ![]() I wish you the best on your path to being a lifetime investor-and learner. Thanks very much for your astute question. But you can also explore individual stocks with a portion of your money, perhaps through fractional shares. I'm a firm believer in broad-based mutual funds and exchange-traded funds because of the immediate diversification they can provide. In fact, I think investing is endlessly fascinating. That's not to say investing has to be boring. These can be great solutions, but take the time to understand your risk tolerance time horizon-and ask questions before you invest. New apps and platforms like robo-advisors, target date funds, and subscription-based planning make creating a diversified portfolio easier (and cheaper!) than ever, but aren't a substitute for doing your own research and creating a financial plan. Investing is no exception, so I encourage you to seek out trusted resources and experts. I've always felt that reading as much as you can and asking questions is the best way to learn about something new. Gamblers are looking for shortcuts to quickly reach a big jackpot, but more often than not, it’s the slow and steady investors who reach the finish line first. It makes me think of the tortoise and the hare. But experienced, disciplined investors know how to mitigate those risks with a combination of proper asset allocation, diversification and a healthy dose of patience. Yes, investing always involves risk, because markets go down as well, and companies sometimes go through rough times. ![]() Prudent investing isn't about quick trades, but about staying invested and having a long-term time horizon. It's not about "winners" and "losers" but about building a solid portfolio from the ground up, customized to your individual needs and goals. Unless he's carefully doing his research and thoroughly understands a company's financials, competitive landscape, and management strengths and weaknesses-and then considers how that company fits into his overall portfolio-he's just rolling the dice every time he trades. Consider what professional or institutional traders are doing. Slick trading screens and rapid response times can be mesmerizing and may encourage excessive risk-taking. I can’t be sure, but this sounds a lot like what your boyfriend is doing. The longer you stick with it, the worse your odds become. When you gamble, you're taking on risk for which you're not likely to be compensated. It's serious business, for sure, but it can be immensely rewarding and potentially a great way for both you and your boyfriend to reach your long-term goals.īy contrast, gambling and prudent investing have nothing in common. I was fortunate that my father got me started on the right foot. It took me years to understand the wisdom behind my father's words: building wealth through investing isn't about hot stock tips or fast trades, but about starting early and participating in the markets consistently throughout one's lifetime. Like your boyfriend, I wanted to see a quick profit, and was sorely disappointed. I turned to my father, whose advice was simple: "Pick two broad-based equity funds and split your money." Like you, I had always been a good saver, but I was at a loss when it came to choosing investments for my first IRA. Your question also brings me back to when I was in my early twenties. And therein lies the potential problem-and the distinction I make between sound investing and wild speculating (or as you say, 'gambling'). Although this is convenient, it also allows people to buy and sell stocks without carefully thinking through their decisions. Online tools have made it very easy to trade stocks with a simple click, often at no cost. I can't say for sure what your boyfriend is doing, but I think you're on to something important with the recent GameStop episode being the most recent and extreme example of stock speculating gone awry. To me, it all feels like gambling and scares me. Overall, though, he says it's fun and that I should invest too (right now all of my money is in savings). Sometimes he makes a lot of money quickly and other times he gets upset because he loses. My boyfriend is on his phone all the time trading stocks. Environmental, Social and Governance (ESG) Investing.Bond Funds, Bond ETFs, and Preferred Securities.ADRs, Foreign Ordinaries & Canadian Stocks.Environmental, Social and Governance (ESG) ETFs. ![]() ![]() Environmental, Social and Governance (ESG) Mutual Funds.Benefits and Considerations of Mutual Funds. ![]()
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