Investing for beginners | The stocks you should consider investing in IMMEDIATELY

Nancy Pelosi!!! Hi FIRE Buddies! There is so much information available on investing these days, everyone seems to be selling you something, whether it is some paid stock picking service or someone telling you how much money they made with Nvidia. It can seem really overwhelming to the beginner investor, and honestly even for the intermediate investor. I wanted to distill it down for you. I’m not selling you any voodoo magic. I am just a guy who is passionate about getting folks to become financially stable. And I want to explain investing concepts in a simple manner. It is extremely difficult if not impossible to consistently pick the 5,10,20,30 companies that will do better than the rest. Most folks who invest are going to invest for the rest of their lives. No stock picker makes millions of dollars and then just gives up and stashes their money in a savings account. They always go back in. And that is where overconfidence in stock picking abilities can really burn you. It just takes a few bad moves to wipe you out. Look I get it. We are all human beings who strive to be better than average. You don’t want to just accept whatever returns the S and P 500 will give you. You think you can beat it. And I think if there was some sort of actual consistent way for someone who doesn’t have hundreds of millions of dollars to beat the S and P 500 year after year, decade after decade, then it may be worth pursuing for some folks who want to dedicate the time. But what do most savvy investors end up doing anyway? Index funds. Will savvy folks still pick individual stocks from time to time? Yeah, we all want to feel good if we actually pick a few good ones. But the most savvy of investors also realize that they probably won’t beat the market. I’d say if you do want to pick individual stocks, treat them like junk food. A little is fun, but too much of it and you will get sick. Stick with mostly index funds, at least 80-90% if not 100% and over time, you will end up better than the day trader and the buy and hold stock picker. The reason is: one of the key factors to success in investing is your conviction. The reason why people buy high and sell low is that they never believed in what they were investing in the first place. And that is what I am here for. To help you understand a bit better about what you are doing when you are investing, specifically in index funds. So let’s say you buy VOO using money in a Roth IRA. What are you actually doing? VOO is an exchange traded fund, like a collection of hundreds of slivers of stocks of the 500 biggest companies in the United states. The beautiful thing about VOO or any fund that represents the S and P 500 is that it is self cleansing. If you believe that the U.S. will continue to have great companies that make money and create jobs and make life better for people, then invest in VOO. When you invest, you are optimistic about the future. Consider the million dollar bet from Warren Buffett against the hedge funds in 2008. Warren Buffett put the money in VFIAX, Vanguard’s S and P 500 fund, with very low fees, a mere 4 dollars per $10,000 invested or an expense ratio of 0.04%. The Hedge funds had a fee of 2% plus 20% of the profits. At the start of the bet in 2008, the hedge funds came up ahead, with a loss of 23.9% vs a loss of 37% for the index fund. But from 2009 to 2014, the index fund came out ahead, every single year. Which is better? The debate still goes on today though because the hedge funds will argue that their goals are different, that they want to also protect against losses in an economic downturn. Also, looking farther back, the hedge fund did beat the S and P 500 from 2002 to 2007, up 95% even after fees were taken out, compared to 64% for the S and P 500. Subscribe if you want to learn more, share this video with someone you like, if you enjoyed today’s episode, happy investing and lets get financially savvy together! You only have to be right a few times, on the big stuff that truly matters. Don’t sweat every small detail. NOTE: Nothing said by anyone on this channel can or should be considered as financial advice, please do not buy anything unless you have done your own research.