Minimizing Individual Stock Risk

Reminder to self:  The market always reaches a new high after a decline, but individual stocks may not.

Here's my real life example.  In 2013, I bought a "good" stock that had declined 33%.   It declined another 66% before recovering.  It's still down 49% from when I bought in 2013.   If I had bought S&P 500 index, in 2013, I would be up 431% today.  

I've learned my lesson. My strategy going forward is to invest mostly (over 95+%) in stock index ETFs to eliminate individual stock risks.  Specifically, I will buy VOO and MGK, which are the S&P500 and Large Cap Growth Index ETFs.

In the future, I may do limited trading of individual stocks, but less that 5% of equity investments.  It's still fun to pick a big winner occasionally, but I don't do it often enough to beat the returns from VOO or MGK. 

Disclosure:  I currently do not own VOO and MGK.  I plan the buy some when the market declines 10% or more in the future.  In the meantime, I am selling off my individual stocks as they recover, which may be never for some.🤡

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This is not financial nor investment advice. Please consult a professional advisor.

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