Professional Struggle 📈📉

Professional Struggle

Stock picking is an art, whether you are a professional at it or a passive amateur. Money managers look to build the best basket of stocks and assets with the ultimate goal of beating the market, also known as the S&P 500. Instead of following the stocks that the indices track, money managers look to mid-cap and small cap stocks for a greater risk to return ratio with the hopes of the stocks out gaining their larger counterparts in the same industry. Warren Buffett, on the other hand, tells retail investors that an unbeatable strategy to gaining wealth in the stock market is to invest in the SPY S&P 500 index ETF itself.

In the year of 2021, it looks like the S&P 500 has won once again. As the old stock market ideology goes, “A monkey picking stocks will outperform professional stock pickers”, which was proven in a study. According to Morningstar, nearly 85 percent of active US stock funds underperformed the S&P 500 this year, marking an increase from the 64 percent last year. When comparing these funds to mid-cap and small cap indices, they ended up performing well, but the main indices proved to be too much. Stock pickers believed this year that they could find bargains and stocks displaced from their true value after a strong ending to 2020, and this was true until the end of the first quarter of 2021, where large cap stocks took control and never looked back. However, it’s safe to say that a lot of Invstr users outpaced the S&P 500 this year with the number of crazy gains we’ve seen, and the Portfolio Builder has completed this feat too, which is something to keep in mind when brainstorming investments for your portfolio. Did you beat the market this year?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

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