Comments by "Magic Beans" (@Magic_beans_) on "Stock Indices u0026 Index Fund Investing" video.

  1. One thing I’d add here is that while index funds provide market-average returns, that’s way better than most individual investors get following a do-it-themselves approach. If someone doesn’t take the time to learn about the market and develop a solid plan, they’re very likely to buy on hype and sell due to fear. Why is this important? In 2022 Amazon saw a 50% drop in their stock price, but by the end of 2023 when I’m writing this they’ve pretty much recovered. If someone saw the drop and sold their shares, they’d wind up taking a loss. Suppose instead they’d kept their head, reassessed whether they still believed in the company long-term. If they did, they could hold on and recover their money, or even buy more shares at the cheaper price and make some money as the stock recovered. Anyway, index investing. If that appeals to you, a next step might be to look up the “three-fund portfolio” or the broader idea of the “lazy portfolio.” It’s not specific funds so much as a concept: pick a handful of funds representing different asset classes — just an example, but let’s say one for US stocks, one for foreign stocks, one for bonds, and one for real estate — and allocate your money across those according to your risk tolerance. From there you can just keep depositing and maybe check in every few months or even years to see if it needs rebalancing.
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