[nicholas73]

I actively traded stocks for a period. I can say that any gains you make represent work like any other, except you can lose all your money. If you do not want to focus on trading, do not trade. It can be a horrible way to live.

Warren Buffett's #1 rule is: Do not lose money. #2: Never forget rule number one.

What you really learn is that the amount of risk you should take on actually is a lot less than you think it is. Too much volatility will kill your returns (Kelly Criterion).

Second is that you shouldn't make an investment unless you just about have domain level knowledge. You need an edge. Over-trading increases volatility, which is bad because you lose more than you gain just by laws of percentages.

If I could tell my younger self what to do, I'd tell him to just sit tight. Hold the money and don't worry. You don't need to invest it all. At some point there will be a market crash and it will be a no-brainer to buy. Buy then and hold for long term. And you can hold because you have a cash cushion, and a price that makes financial sense no matter what (like a good dividend or rent percentage to invested capital).

[ffumarola]

I would agree for the most part with the exception of "At some point there will be a market crash and it will be a no-brainer to buy."

Timing the market is incredibly difficult. I'd just suggest setting up an automatic dollar cost averaging scheme into a fund mix of your choice and ignoring it from that point on. As long as you have a decent enough time horizon, you'll wind up well ahead.

[nicholas73]

I agree and disagree. I think legging into positions is a great way to ensure lower volatility and is a good for psychological discipline. However market timing works in the Buffett sense, when you make a purchase that immediately makes sense no matter (almost) what the asset price does after that. If you could hold forever, you'd simply make money off the dividends. Like buying a house - you can't lose due to price fluctuation (barring a ghost town event) if you planned to make money from rent. But if you bought hoping for capital appreciation, you could get really hurt.

[dsutoyo]

Good advice and thanks! When I was a lot younger, I definitely overtraded and didn't really do enough homework.