Solin’s Rule For Picking Stock “Winners”
The next time your broker recommends you buy an individual stock, just say this: I follow Solin’s Rule. I don’t want to try.
https://vimeo.com/380021191
Here’s myrule for picking stock “winners”:
Don’ttry.
Don’t listento anyone who says they can identify the next Facebook.
The odds arestacked against you.
Over the longterm, a relatively small percentage of stocks (around 20%) account for almostall gains in the domestic market.
You haveabout a 40% chance of picking a “loser.”
The chance ofa “big score” is about the same as the possibility of a huge loss.
There’s abetter way.
Buy alow-cost index fund that tracks the S&P 500 index or the Russell 3000index.
Historicalannualized returns for these funds are around 10%.
That’s a“winning” strategy.
The next timeyour broker recommends you buy an individual stock, just say this:
I followSolin’s Rule. Idon’t want to try.
