This is a lot more work than investing in a mutual fund, but you can derive a great deal of satisfaction from picking your own stocks. Over time, perhaps, you'll do better than most of the funds.
Not all your stocks will go up - no stockpicker in history has ever had a 100% success rate.
Warren Buffett has made mistakes, and Peter Lynch could fill several notebooks with the stories of his. But a few big winners is all you need.
If you own 10 stocks, and 3 of them are big winners, they will more than make up for the 1 or 2 losers and the 6 or 7 stocks that have done just OK.
If you can mange to find a few triples in your lifetime - stocks that have increased threefold over what you paid for them - you'll never lack for spending money, no matter how many losers you pick along the way.
And once you get the hang of how to follow a company's progress, you can put more money into the successful companies and reduce your stake in the flops.
You may not triple your money in a stock very often, but you only need a few triples in a lifetime to build up a sizeable fortune.
Here's the math:
If you start out with $10,000 and
- manage to triple it 5 times, you've got $2.4 million, and
- if you triple it 10 times, you've got $500 million, and
- 13 times, you're the richest person in America.
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