OK, so the idea of buying individual stocks is about as out of fashion these days as shoulder pads and big hair. For more investors, low cost index funds, especially exchange-traded index funds, are the way to go. You can see why. Maybe you read the academic paper which found that when smart investors just stuck to their few, conviction picks they could actually do pretty well.
No, really. With either strategy, day traders are hoping that those stocks will move in the direction they expected them to.
Instead, they want to take advantage of it. Never, under any circumstances, borrow money to invest. While most investors might shy away from relying solely on stocks that bounce up and down like a pinball in a pinball machine, day traders love these types of stocks because they might be able to make a quick buck off them.
And day traders typically end up on the wrong side of a trade more often than not. Day trading also typically comes with costly commissions and transaction fees that will eat into any earnings you might wind up getting, so your profits need to be high enough to cover those costs. Oh, and your earnings from day trading will also be subject to short-term capital gains taxes, which is the same rate as your income tax rate. Day trading amplifies that feeling to an extreme level.
The emotional and psychological toll of day trading has left behind a trail of long-lasting health issues both mental and physical , broken marriages and even suicide. Feb 18, - pm. Private Equity Interview Questions. Best Response. Junior O Rank: Chimp 15 Feb 18, - pm.
Hedge Fund Interviews. Toughest PE Interview Questions. Bondarb thank you so much, very insightful response. Private Equity Case Interview Samples. Feb 19, - am. Leave this field blank. Investment Bank Interview - Toughest Questions.
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Footer menu. Type your email address. Personal observation suggests most early retirement goes something like this: i Have a bad day at the office; ii go home and after a quick back of the envelope calculation decide you can afford to leave, and iii walk into your boss's office the next morning to resign. Several glorious months of gardening leave follow, but then life goes downhill.
Most early retirees will find themselves bored, broke or both within a few years. The secret to a happy retirement is twofold: a be confident you have enough money to retire, and b have firm plans for what you are doing next. The thing is that, ironically, many people in finance are poor managers of their own liquid assets. A lot of us tend to be high spenders, having developed expensive tastes. This combination makes it hard to walk away. Also, when you get near forty, you may well have young children.
Paying for private education and pony club might seem necessary to keep up appearances, but it will delay your retirement considerably. For successful early retirement you need to keep your expenses low whilst still working.
Your capital will go further if you take risks and trade your own account. However you must be realistic about the chances of trading profitably: will your strategy really survive outside the ecosystem of a hedge fund or without the flow of orders you see on the buy-side?
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