5 Lessons Learned from An Unsuccessful Stock Investment

Hand Over Accounts to Institutional Managers

In the back of my mind until as recently as 5 years ago was the hidden belief, bias that for a retail investor (us) outperforming the markets & superior performance is a realistic assumption vs a passive index investing approach with rebalancing. It’s a common behavioral blind spot for investors to have. It’s also capable of sneaking up to investors, laying dormant within the subconscious ego, creeping quietly in a ZIRP environment watching others’ portfolios increase faster.

I sure kept a small brokerage account to buy the kind of stocks Warren Buffet buys or my own picks of stuff nobody has ever heard of. And this can work at times when markets are going up you can get lucky… But in my opinion, it stopped working shortly after COVID, demand was pulled forward, and stocks rose. Markets went up, and so did indexes; that is easy to predict.

Now markets are at all-time highs and it’s largely due to AI and mag 7. It really is hard to say what is overvalued and under. I have handed over my personal accounts, as well as clients, to institutional managers that are able to trade in large blocks. That’s where they have distinct advantages over a retail investor with a counterparty. When the chips are stacked against you, you are going to lose.

Stephen Roth
Founder Principal, Limestone Financial Group

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