The exception to this rule is if you are offered a 401-k (IRA) from your employer or can start a Simple IRA plan if you are in business. You should take advantage of this. That’s because 10% of your contribution is tax deferred. So in a worst case scenario you’re not going to have much when you retire but you didn’t have to pay tax on 10% of your income. Some employers will contribute to your 401-k and that’s better still.
Otherwise, this is a suckers game! Companies issue millions of shares, and you have no control over when and if they do this. Anytime they want to raise money, they can print more shares. This is called dilution. Imagine ordering a shot of your favorite whiskey and as soon as the bartender pours the drink he adds an equal amount of water to the mix. How long would you stay at that bar?
All companies go through good times and bad times. When Trump was in office the energy companies were getting crushed. That’s because he opened up the drilling. Biden stopped the drilling cause he wants “green energy.” Now the energy companies are making a fortune. A simple election and how amazing the results! Hundreds of stocks have changed direction. Do you have time in your busy day to follow this?
What about day trading? When you buy a stock, you buy at the offer price. When you sell it’s at the bid price. Already you’ve lost money. If a hedge fund can return 5 to 7 percent above inflation annually that’s great and they spend all day glued to the computer looking at charts.
So why not just go to a casino? It’s the same game of risk vs. reward, fear vs. greed, and money management. You could bring a date or you might find a date. There’s entertainment, you can drink, it’s all good.