The Perils of Investing in Individual Stocks (Bestie Ep) #767

Dec 27, 2023

The podcast discusses the risks of investing in individual stocks and emphasizes the importance of diversification. They address common concerns and argue against this investment approach. They also discuss the disadvantages of investing in individual stocks, such as higher taxation rates and potential losses. The hosts caution against investing in single stocks of your employer or companies in your industry. They highlight the dangers of overconfidence and stress the importance of accurate record-keeping. The podcast also explores the benefits of Airbnb and discusses the importance of simplicity in investing.

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Introduction

00:00 • 2min

The Perils of Investing in Individual Stocks

01:33 • 14min

Disadvantages of Investing in Individual Stocks

15:50 • 7min

Investing in What You Know

22:27 • 13min

The Perils of Investing in Individual Stocks and the Importance of Accurate Records

35:32 • 2min

Exploring Edinburgh and the Benefits of Airbnb

37:30 • 7min

The Importance of Simplicity in Investing

44:49 • 6min

A Conversation About Belgian Quads and Dark Beers

50:38 • 3min

Think about the last novel you read that included a dangerous quest. If it’s a fantasy like the Hobbit, there might be giant spiders, goblins, and dragons- but in the end, it’s worth it because of the unfathomable treasure and riches that await them. The thing is, when we’re talking about investing in single stocks, the chance that this perilous journey ends up with a happy ending is much less likely, but folks continue along in their quest. Why? Maybe it’s because of the sophisticated tools that we have at our fingertips, or because it’s more accessible than ever with apps like Robinhood where you can buy and sell for free, or maybe you just think you’re smarter than everyone else. And sure you’ve heard of individuals who have crushed it by investing with a company like Tesla, but we’re still not fans of this type of approach. So in this episode we tackle some of the most common arguments advocating for investing in single stocks, why we ultimately disagree, and how you should invest your money instead. Single stock investing is unnecessary and can often be problematic.

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