Why should I invest in individual stocks and not mutual funds, index funds, and ETFs?

You shouldn't.

I don't have big enough balls to invest only in individual stocks for two reasons:

1. I don't have the knowledge to be able to do that successfully
2. I don't have the time to learn it


What I do, instead, is I invest 15% of my paycheck into my 401k which consists of an S&P 500 fund and my employer sends another 3.5% to it. I max out my IRA each year, spread out evenly across each pay period. My IRA consists of Vanguard funds and one ETF (S&P 500 fund, US Growth Fund, and VGT, their tech sector ETF).

I do have some individual stocks that I dabble with (Apple, Microsoft, Meta, and Disney since I'm very confident that those companies are the ones who will be around for a very long time and continuously grow over time. I don't really invest into these often, though, but I keep telling myself I will. My goal is to start putting $100 a month spread out over those but it's just a matter of actually doing it and not forgetting.

Overall, my opinion, as you can see, is the S&P 500 is the way to go for long term steady growth.

Depends if you like to gamble like me... I'm an addict at heart and unfortunately can't do drugs any more.

Why not both? I have plenty of each.

Investing in individual stocks is like sports betting, you are trying to pick winners from losers and you can get a rush if you make a good pick

I think until you can become adept at evaluating the financials of a company, if you’re even interested in doing so, stick to low cost mutual funds and/or a few ETF’s that mirror the S&P and/or Nasdaq.

As always- best of luck to you and I hope you never need it.

Don’t do it. Mutual funds have made me a ton of money, but almost all of my (few) individual stock picks have been losers or break even. Only one is a big gainer, and I haven’t sold yet, so it’s not too late to lose money on it too.

My observation is that ETF's are slow and steady. You're not going to have a 30-40% swing in ETF's. Individual stocks however can swing wildly. Bigger risk and bigger potential earnings. I have a brokerage account that is my side money that I am a bit more willing to gamble with. Retirement accounts are all held in diversified ETF's. It's similar to the 95/5 guy above me. I'm currently up an unsustainable/unrealistic amount on my individual stocks. I've sold off my initial investment in most of them and I'm riding with house money currently but still have a couple more to go. If there is a critical plan with the money, ETF's are the way to go. If you jut feel like putting it on the roulette wheel, individual stocks are the closest thing to Vegas you get in the market.

Go with the Vanguard Total Stock Market Index.

Buy stock from companies you like and use, believe in… do you shop at Amazon? Do you have iPhone, watch, Mac then get Apple. Do you shop at Costco or Walmart? Do you enjoy Netflix? Do you use a Visa card everyday?

I ate shake shack once in 2010 and loved it. Ended up buying stock in 2016 and I’ve since tripled my money. I’m at almost 1000% gain with Netflix, bought it because I watch Netflix daily. Those are examples of how you might do well with stocks, buying industry leaders for products you enjoy… gives you a vested interest and small piece of ownership of products you use and enjoy.