Website Building

June 21, 2017 Bev FeldmanHow To, Social Media, Tools, Website Traffic

In this article

• It’s like Yellow Pages 2.0
• Embrace your social side
• Driving the search

With the abundance of free tools available to boost your business’s online presence, it can be downright overwhelming to know where to begin. How do you decide which ones are the best use of your limited time?

Well, there are three basic tools every new website owner should consider. You might choose to focus on them differently depending on the type of business you have and your long-term goals, but each matters in its own way.

Let’s say you have a physical storefront and your goal is to get more shoppers into your store, you’ll want to start with the Google My Business tool. Then, build your online audience — and forge relationships with potential supporters — by turning to one of the most versatile tools: social sharing. And finally, when you’re ready to focus on search results, Google’s Search Console will be your go-to online tool.

Here we’ve laid out an action plan using these three tools that can help you effectively build a website and craft your online presence.

It’s like Yellow Pages 2.0

What’s the first thing most people do when they’re trying to find a local business? They Google it. So if you have a brick-and-mortar store, you’ll want to start by ensuring anyone doing a Google search is able to find it. For instance, if you have a hardware store, it should show up in Google searches for “hardware stores near me.” People expect to access information without doing a ton of research, so it’s important that all your key information, such as your location and store hours, appears in search.

Google My Business is a website that allows you to enter basic information about your business, such as the address, phone number, type of business, and your business’s website. Once you’ve visited the site and entered that information, potential fans can find your business when they perform Google searches or turn to Google Maps.

You can even include photos of your store and products and allow visitors to write rave reviews about your fantastic customer service — say, the time you helped someone find the exact right nails for their home project. If you’re keeping your store open longer through November and December in order to prepare for the holiday rush, Google My Business will let you make adjustments to reflect the seasonal changes in your hours.

By using Google My Business for your store’s online presence management, you have the potential to increase the number of shoppers who walk through your door and make purchases.

Embrace your social side

Posting your business info to Google is extremely useful, but you’ll also want build a broader online audience. For this, social sharing channels such as Twitter, Facebook, and Instagram are going to be your best friends. Start by considering which site to focus on. If you create visual products — say, handcrafted wooden wedding signs — your best bet is a more visual platform such as Facebook or Instagram, where you can show photos of your completed products, like one of your signs in use at a wedding, or even photos of those signs being made.

Twitter, on the other hand, can be a great tool for engaging with your potential audience, starting conversations, and making connections. If you’re a restaurant in search of publicity via food bloggers, Twitter allows you to engage with bloggers and critics and build an organic audience from those interactions. As an Entrepreneur article explains, “Read your target audience’s online content and join discussions to learn what’s important to them.”

You can search for hashtags your audience would be likely to use, such as #foodbloggers and #recipe, and then start interacting. Retweet others’ posts with your own commentary, ask them questions, and engage so that they know who you are. That way, they’ll be more likely to think of you the next time they’re looking for a restaurant to highlight.

And remember: staying consistent is ultimately more important than which platform you decide to use. Just work on growing a strong online presence on one or two social media platforms rather than trying to win them all. And since your ultimate goal is to draw visitors to your own website, make sure the URL is clearly listed in your bio and directs people to your homepage or contact form.

Driving the search

You gave Google your business information, and then you began building your audience. Now it’s time to focus on search results, which is where Google Search Console comes in. Previously known as “Google Webmaster Tools,” Google Search Console helps website owners “monitor and maintain [their] site’s presence in Google Search results.”

Basically, it ensures Google has access to your website and can better position it in Google searches. It also lets you see what terms users type into Google search to land on your website, learn which other websites link to your site, monitor your website for malware or spam issues, and alert Google if you have new content you want to show up in searches.

Say you make small-batch organic coffees and want your products to show up in Google searches for “organic coffee” and “small-batch coffee.” Google Search Console offers a tool called Fetch as Google. You type in your business’s website, which tells Google to check out (or “crawl”) the website and include it when people search for small-batch coffees. There’s also a handy tool called Search Analytics, which shows you which other websites link to your online store — hopefully, ones related to coffee. If you’re interested in learning more about Google Search Console but aren’t sure where to begin, you can find some great tutorials online. For example, WordPress.com offers a step-by-step tutorial for adding your website to Google Search Console.

The most important thing to remember when using these tools is that your website should remain the center of all the action. Although powerful, they’re intended primarily to complement your website, drive traffic to it, and, eventually, give your business that many more reasons to thrive.

Reach your goals with WordPress.com Courses.

Build your skills with in‑depth courses for any level. Taught by the best WordPress experts on Earth.Browse courses

ABOUT THE AUTHOR

Bev Feldman

Bev Feldman is a Boston-based jewelry designer, blogger, and freelance writer specializing in eCommerce, blogging, small business, and parenting. She’s passionate about eco-friendly living, which you can read about in her personal blog, bevgoesgreen.com.

Source: https://wordpress.com/go/website-building/your-online-presence-starts-with-these-3-free-tools loaded 11.04.2021

Web Design

June 30, 2017 Jenny McKaig SpeedBlogging, Social Media, Tips, Website Traffic

So, you want more eyes on your website? You’ve invested time, sweat, energy — and perhaps even a few tears — into creating your site. You’ve showcased your business so your community knows both what you do and why your work is valuable. Increased website traffic can help you stand out among the competition, lead to more sales, or increase user inquiries — but how can you get more page views?

There are three types of increased website traffic: owned, earned, and paid. All drive viewers to your site, but since an investment in time rather than money is often best for any small-business owner’s budget, owned and earned traffic should form the cornerstones of your online presence. When you increase website traffic from owned media — your website, blog, social media accounts, mailing list, or any other sites where you’re in charge — you’ll be the one sharing your content. So when you join a department store’s mailing list, receive emails about upcoming sales and events, and use those emails to revisit the store’s site, you’re seeing owned traffic in action.

Earned traffic, by contrast, happens when other people share content leading to your website. When a supporter shares your social media post about your newest menu item with their audience or a food blogger raves about your restaurant, that’s earned traffic for your business. Such traffic pushes you outside your current community and builds trust through positive word-of-mouth marketing in the digital realm.

Both techniques require consistency and commitment, but they are long-term strategies that will eventually reap huge rewards.

Own the connection

Your website, blog, social media accounts, and any other platforms you manage are opportunities for more owned traffic — if you leverage them. Think of your website as more of a long-term commitment — it’s not just an online brochure that passively draws in traffic.

Use the following tips to help sow the seeds of connection with consistency and commitment:

● Commit to contribution: As marketer Seth Godin suggests, you must add value to your fans’ lives. When you prepare a blog or social media post, ask yourself how you can best contribute to your community. Organize a weekend sale at your boutique and donate a portion of the proceeds to a local charity — then let your supporters know so they can also support the cause. From sharing your business’ positive impact to inspiring your community, your commitment to contribution will shine — and your website traffic will see a boost.

● Build a solid plan: Consider creating marketing and editorial calendars. A marketing calendar is a timetable of what content you plan to use for marketing your business, and an editorial calendar plans out how you’ll market that content (where you’ll share it, how you’ll share it, and so on). Map these out in advance, and be purposeful with your content, including special events, holiday sales, and inspiring information. Then choose a variety of places to share, ideally sites where your supporters spend time. Plan out your summer sales, from the Fourth of July to Labor Day, and keep to your schedule. This is a systematic way to gain both owned and earned traffic, and when you’re a busy business owner, advanced planning saves valuable time.

● Get blogging: A consistent blog focused on what you contribute builds awareness and trust that supports your place in the community. Your fans will come to recognize you as a worthwhile source of information and inspiration with a steady stream of content. Keep that content fresh (and your audience up-to-date) by focusing on what you’re up to — events, industry trends, positive community stories, and more. To start blogging, brainstorm a list of topics to support your fans. If you own a yarn shop, for example, think about what inspires your fans and write content that informs them about what you provide. And remember to write to your audience just like you would talk to them — using language that speaks to them. The more you blog, the easier it becomes.

● Share on social: People around the globe navigate social media daily — and that includes your supporters. Choose platforms where your shoppers hang out: are they mostly on Facebook, or do they prefer Instagram, Pinterest, or the Twitter-verse? You can engage your community by asking questions, and providing comment-worthy content and shareable posts. When you commit to posting regularly and providing real value, you’ll find potential supporters are drawn to you. A nutritionist sharing healthy recipes, for example, is going to attract people who care about healthy eating — ideal clients for his or her business.

Earn the shares

Ever had a family member or friend tell you about a service, product, or website they adore? Of course you have! People love giving the goods on what they love. Your owned traffic can expand into earned traffic through online sharing and positive word-of-mouth marketing. Keep the following in mind to optimize these earned shares:

● Be engaging: Content that leverages inspiring stories and works to keep readers informed helps you connect with your community. People who want to know more about your business — and end up linking to, sharing, and commenting on your content — are a truly engaged audience. Again, consistency matters. Blog, post on social media, and deepen your knowledge of your fans’ wants and needs. Then, provide compelling content. An engaged audience is a hot commodity.

● Host a contest: Amplify engagement with a fun contest, and require your supporters to share your content on their social media channels or blogs. A photographer, for example, might host a contest for a free photo session, requiring all entrants to like and share the post about the contest on Facebook. A contest can multiply your audience by allowing you to reach your fans’ friends, families, colleagues, and communities — score!

● Connect with key figures: People who have extensive reach and are trusted in your field can have a hugely beneficial effect on your online presence. A fashion blogger delightfully dishing on an independent boutique will lead earned traffic to that store’s site. Word-of-mouth marketing drives traffic in the digital realm, and with experts you get to learn more about your field while also reaching more people. Build relationships by reaching out or engaging others online, cross-promote when you can (share their content when they share yours), and watch your website traffic grow!

Website traffic doesn’t have to be paid for — it can be earned. And you might just build some lasting relationships along the way!

Source: https://wordpress.com/go/web-design/want-to-increase-website-traffic-own-it-and-earn-it/?utm_campaign=1218218 loaded 11.04.2021

It starts with nine basics.  She doesn’t have to read any further than these to make it work.  Just do it.

1. Avoid fiscally irresponsible people.  Never marry one or otherwise give him access to your money.
2. Avoid money managers. It’s your money and no one will care for it better than you.
3. Avoid debt.
4. Save a portion of every dollar you get.
5. The greater the percent of your income you save and invest, the sooner you’ll have F-You money.  Try 50%.  With no debt, this perfectly doable.
6. Put this money in the Vanguard Total Stock Market Index Fund (VTSAX)   This is the fund you already own, so just keep adding to it.
7. Realize the market and the value of your shares will sometimes drop dramatically.  People all around you will panic.  They’ll be screaming Sell, Sell, Sell.  Ignore this.  Even better:  Buy more shares.
8. When you can live off the dividends VTSAX provides you are financially free.
9. The less you need, the more free you are.

Willing to go a step further? Notice what you are not doing:

•  No expensive money managers
• No fancy strategies
• No exotic, hard to understand investments
• No weekly, monthly or even yearly management
• No effort; just keep adding to the pot.

More?  I thought you’d never ask!

The Details:

1)  Avoid fiscally irresponsible people.  Nothing will destroy your wealth faster than letting someone else have access to it.  Fiscally irresponsible people have squandered their money and will happily squander yours.  They will try every dirty trick possible to get their hands on it.  Kick them to the curb.  Look for people who will add to your efforts.  This applies to more than just money.

2)  Avoid Money Managers.  They are expensive at best and will rob you at worst.  Google Bernie Madoff.  Seek advice cautiously and never give up control.  It’s your money and no one will care for it better than you.  But many will try hard to make it theirs.  Don’t let it happen.

3)  Avoid debt.  Never borrow money.  Never carry a credit card balance.  Almost everyone else you meet will be borrowing money to buy this or that.  It will look normal.  You might be mocked.  You don’t want to run with this crowd.  People still refuse to believe I have never had a car payment.

•  The only exception might be for a house.  But don’t be in any hurry. Think long and hard before taking out that mortgage.  If you are a disciplined saver, renting is damn near always the better fiscal choice.  (If you are not, a house can act as a forced savings plan.  A poor one, but at least a plan.)
•  A house is not an investment.  In fact it has the very worst characteristics of an investment.  It is only place to live and an expensive indulgence.  Buy one only if you can easily afford it and want that particular lifestyle.
•  Most people will argue this strenuously.  They are wrong.  This is why. This guy got it right too:

 4)  Save a portion of every dollar you get.

50% is good.   With no debt, this perfectly doable.  Think this is too extreme?  Check out the conversations here:  Early Retirement Extreme and Mr. Money Mustache. The most valuable thing you can buy with money is not cars or clothes or vacations or houses.  It is your financial freedom.  So pay yourself first.  Most people spend every cent they make and borrow to spend even more.  This is nuts.  Those who do are slaves to their employers and slaves to their debt holders.  You weren’t raised to be a slave.

5)  The greater the percent of your income you save and invest, the sooner you’ll have F-You money. The obvious reason this works is that the more you save the more you’ll have.  The less obvious reason is the less you learn to live on the less you’ll need to be financially independent.  See point #9 and The Monk and the Minister

6)   Put this money in the Vanguard Total Stock Market Index Fund (VTSAX).  You want the money you save to work hard for you.  In VTSAX it will.

• This is an “index fund.”  You can learn more about exactly what that means anytime (The Stock Series is a good place to start), but for our purposes here it means very low cost so you keep more of your money.
• VTSAX is an index fund that invests in stocks.  Stocks, over time, provide the best returns.
• Vanguard is the company that operates the fund and it is the only investment company you need (or should) deal with.  Vanguard’s unique structure means that its interests and yours are the same.  This is unique among investment companies.
• You might find a fund in another investment company that is a bit cheaper.  But you can’t trust these other companies long-term.  Their interests are not your interest.  If you play with snakes, to quote Dave Ramsey, you’ll eventually get bitten.  Don’t bother.  Stick with Vanguard.
• You will hear occasionally how “actively managed” funds beat index funds.  It will seem obviously better to switch to one of these.  It’s not. Don’t.  Very rare is the manager who can consistently outperform the index.  While who they are it is obvious after the fact, it is impossible to know who it will be out of the thousands trying at the start.  Even if you were to get lucky, they retire, quit, die or simply lose their touch.  Plus they are more expensive.  Don’t bother.
• We choose to invest in stocks because, over time, stocks outperform everything else.  They give you the best returns with, using an index fund like VTSAX, the lowest effort and cost.  Never try to pick individual stocks unless you turn pro.  Even then you likely will underperform the index.  The vast majority of pros do.

Owning 100% stocks like this is considered “very aggressive.”  It is, but you have decades ahead.  Market ups and downs don’t matter as long as you avoid panic and stay the course.  Perhaps 40+ years from now you might want to add a Vanguard’s Total Bond Index Fund to smooth out the ride.  Worry about that 40 years from now.

7)  Realize the market and the value of your shares will sometimes drop dramatically.   No worries.  You’ll be holding this fund for 40-50+ years.  During that time the stock market will very likely drop dramatically 4 or 5 times.  There will be real and serious problems that cause it.  Each time people will panic.  Each time they will predict this is the end.  Each time you’ll be hearing Sell!  Sell!  Sell! If you are smart, you will ignore this.  If you are very smart you will use these times as an opportunity to buy more shares at bargain prices.

As I write this in June 2011 the S&P is trading around 1300.  Two years ago it was at 670 and people were predicting with certainty it would go to zero. Oops. It doubled. By the way, there will also be times then the market soars and people will begin to say this is a new age.  Things are different this time.  Things will never go down again.  They, too, are wrong. Warren Buffett, the greatest investor of my age, said “When others are fearful be greedy.  When others are greedy, be fearful.”  Sound advice.  The wheel always turns.  Things always recover.  If someday the end really does come, it won’t matter anyway.

8) When you can live off the dividends VTSAX provides you are financially free.  Actually a bit sooner.  VTSAX typically pays a dividend of ~2%.  Sometimes this will be higher, sometimes lower.  Anytime you can live off it you are financially independent.  But when you can live off of 3-4% per year of your net worth you are also free.

There you have it.  Remember, this advice is for my 19-year-old daughter. (We do things a bit, but not much, differently) Now, if I can just get her to read it…..

Addendum 1: The case study:  putting-the-simple-path-to-wealth-into-action

Addendum 2: What if you can’t buy VTSAX? Or even Vanguard?

Addendum 3: When the time comes and you want to know more about this investing stuff, here you go: Stock Series.

Addendum 4:  My Path for my kid: The first 10 years

Addendum 5:  Some suggest my 50% target savings rate is too aggressive. Others that it is too wimpy. That for you to decide. But if reaching financial independence is important to you, the chart below will give you a good idea as to just how powerful your savings rate can be.

The numbers in the chart above assume an 8% annual investment return and that you’ll live on the classic 4% withdrawal rate which implies assets of 25 times your annual needs. So, this is not a gospel, but a guideline.

“… if I were like him, I’d watch my account balance grow to $1,000.  Then watch it move to $2,000 and upwards…once I had a balance of $10,000, each successive $1,000 milestone would pass more quickly than the last.  Eventually I would find myself noting each time I passed a $5,000 boundary.  He enthusiastically explained the “fun” of being able to measure balances by crossing the tens of thousands threshold: seeing twenty thousand turn to thirty. And thirty thousand on to forty, and on and on to financial freedom.”

Source: https://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth loaded 22.03.2021

Pastor Natalie gives a thoughtful perspective on examining moments that can be life-changing regarding leaving the 9-5.

ESCAPING THE 9-5: IMPORTANT LIFE-CHANGING MOMENTS

Many Nigerians are risking their lives and lose money and livelihood opportunities by attempting to migrate irregularly to Europe. But what is the situation like in European countries? Here, we share key facts every undocumented migrant should know when crossing a European border. This could save your life, time, money and energy.

How can irregular migrants find a job in Europe?

Finding a job in Europe is very different to finding a job in Nigeria. First migrants need a visa.

The employment market is much more formal and everyone must have official papers such as passports, working visas and transcripts in order to find a job. There are special law enforcement agencies, called labour inspectorates, whose job it is to identify illegal workers.

A large number of potential Nigerian migrants lack knowledge on destination country policies and hold unrealistic expectations about support upon arrival. For example, in Seefar’s research 20% of Nigerians interviewed expected to become citizens of their destination country, which is an extreme rarity for West African asylum seekers.

72% of Nigerian potential migrants said that they expected to receive government support in finding a job in their intended destination country. 9 out of 10 expected to find a job in their destination country within four months.

Migrants without papers cannot get a job and governments do not offer any support. Those who work illegally risk getting arrested. Some employers who hire irregular migrants know this and can threaten them with deportation in order to gain control.

The unemployment rate is high in some European countries, particularly for young people.

Countries such as Italy and Greece have similar unemployment rates to Nigeria. Many Europeans cannot find a job and it is significantly harder for migrants who don’t speak the language.

Ever wondered what are the skills one needs to find a job in Europe? The type of jobs available in Europe are very different and require different skills. Qualifications from Nigeria will not necessarily be recognised by employers in Europe. Indeed, migrants often do not have the necessary skills to access jobs in Europe.

The ability to speak and write the language of the destination country is fundamental to being able to operate independently. Reading and writing a language is necessary in order to find a job in most European countries.

About Nigerian asylum seekers in Europe

Some Nigerians apply for asylum. But because Nigeria is not at war and the government is not systematically persecuting citizens, Nigerians are not eligible for asylum. Nigerian applications for asylum have the highest rejection rate of all African nationals arriving in Europe.

In 2016, over 20,000 Nigerians were denied asylum and told to return home because they have no legal right to be in Europe. Germany is planning to repatriate 30,000 Nigerian irregular migrants who were denied asylum.

The cost of living in Europe

The daily costs in Europe, such as accommodation, transport and food, are very high. In many European countries, the average family will spend around 700 US dollars per week to live. In the United Kingdom, the cost of living for a migrant is 589 British pounds per week. These numbers do not differ significantly in other European destination countries.

Migrants who are in Europe illegally have a hard time finding a job and governments do not offer any support. Without a job it is impossible to access housing, buy enough food or save money.

Life on arrival in Italy

Life in Italy can be very difficult for African migrants. Years after arriving some cannot afford much food, let alone rent. One Nigerian migrant who lives in a camp in northern Italy said: “There’s really no jobs for us here, just hardship, pain and suffering.”

Because there is no housing available for irregular migrants, many live in shacks and tents in camps which are not safe and very cold in the winter. In January 2018 one camp caught

on fire and was destroyed. One migrant died and others were injured and lost all their possessions.

Even those who are able to obtain a residence permit often remain unemployed. In a migrant complex in northern Italy for example, 90% of the migrants are unemployed. An African migrant said that he had been in Italy since 2011 but never been able to find a job and that he survives by taking food from the garbage.

It is well known that Nigerian traffickers have connections in the migrant reception centres in Italy. They collect young women from the reception centres and force them into prostitution and take most of the money that they earn. These traffickers are very powerful and dangerous and threaten to harm migrants’ families back home if they do not obey their orders.

More Nigerians now decide to return

European countries are changing their laws and policies toward migrants, forcing an increasing number of irregular migrants to return. Find out more.

A migrant may return home voluntarily. It is a voluntary return if it is an assisted or independent return to the country of origin, transit or another third country based on the free will of the returnee. Several European countries now have voluntary return schemes, which means that they support migrants who choose to return to their country of origin. You may access assistance for voluntary return.

Otherwise, it is a forced return, which means a compulsory return of an individual to the country of origin, transit or a third country on the basis of an administrative or judicial act. Deportation and removals are forms of forced return.

Many Nigerians end up returning home poorer that they were prior to leaving. The good news is, there are new opportunities for Nigerians deciding to stay in or return to Nigeria. These opportunities include employment programmes and support for would-be entrepreneurs. For more information about these promising programmes, read.

Did you find this information useful? Share it with friends and relatives on social media.

Source: https://www.themigrantproject.org/nigeria/life-in-europe loaded 09.04.2021

Posted April 6, 2021 by Nick Maggiulli

I stopped picking individual stocks years ago and I recommend that you do the same. But, today I am not going to give you the traditional argument as to why you shouldn’t pick stocks, but a new one. The traditional argument, which you’ve probably heard many times before, goes as follows: since most people (even the professionals) can’t beat the index, you shouldn’t bother trying.

The data backing this argument is undeniable. You can look through the SPIVA report for every equity market on Earth and you will see (more or less) the same thing—over a five-year period 75% of funds don’t beat their benchmark. And remember, this 75% consists of professional money managers working full-time with teams of analysts. If they can’t outperform with all of these resources, what chance do you have? But, I want to put that argument aside for now.

Instead, I am going to argue that you shouldn’t pick stocks because of the existential dilemma of doing so. The existential dilemma is simple—how do you know if you are good at picking individual stocks? In most domains, the amount of time it takes to judge whether someone has skill in that domain is relatively short.

For example, any competent basketball coach could tell you whether someone was skilled at shooting within the course of 10 minutes. Yes, it’s possible to get lucky and make a bunch of shots early on, but eventually they will trend toward their actual shooting percentage. The same is true in a technical field like computer programming. Within a short period of time, a good programmer would be able to tell if someone doesn’t know what they are talking about.

It’s just like this XKCD comic:

But, what about stock picking? How long would it take to determine if someone is a good stock picker?

An hour? A week? A year?

Try multiple years, and even then you still may not know for sure. The issue is that causality is harder to determine with stock picking than with other domains. When you shoot a basketball or write a computer program, the result comes immediately after the action. The ball goes in the hoop or it doesn’t. The program runs correctly or it doesn’t. But, with stock picking, you make a decision now and have to wait for it to pay off. The feedback loop can take years.

And the payoff you do eventually get has to be compared to the payoff of buying an index fund like the S&P 500. So, even if you make money on absolute terms, you can still lose money on relative terms.

More importantly though, the result that you get from that decision may have nothing to do with why you made it in the first place. For example, imagine you bought GameStop in late 2020 because you believed that the price would increase as a result of the company improving its operations. Well, 2021 comes along and the price of GameStop surges due to the wallstreetbets inspired short squeeze. You received a positive result that had nothing to do with your original thesis.

Now imagine how often this happens to stock pickers where the linkage between the decision and the result is far less obvious. Did the stock go up because of some change you anticipated or was it another change altogether? What about when market sentiment shifts against you? Do you double down and buy more, or do you reconsider?

These are just a few of the questions you have to ask yourself with every investment decision you make as a stock picker. It can be a never-ending state of existential dread. You may convince yourself that you know what’s going on, but do you really know?

For some people, the answer is clearly, “Yes.” For example, in Can Mutual Fund “Stars” Really Pick Stocks?, researchers found that “the large, positive alphas of the top ten percent of funds, net of costs, are extremely unlikely to be a result of sampling variability (luck).” This suggests that 10% of people who pick stocks professionally do actually have skill that persists over time.  However, it also suggests that 90% probably don’t.

For argument’s sake, let’s assume that the top 10% of stock pickers and the bottom 10% of stock pickers can easily identify their skill (or lack thereof). This means that, if we choose a stock picker at random, there is a 20% chance we could identify their skill level and an 80% chance that we couldn’t!  This implies that 4 out 5 stock pickers would find it difficult to prove that they are good at stock picking.

This is the existential crisis that I am talking about. Why would you want to play a game (or make a career) out of something that you can’t prove that you are good at?  If you are doing it for fun, that’s fine.  Take a small portion of your money and have at it. But, for those that aren’t doing it for fun, why spend so much time on something where your skill is so hard to measure?

And even if you are someone who can demonstrate their stock picking prowess (i.e. the top 10%), your issues don’t stop there. For example, what happens when you inevitably experience a period of underperformance? After all, underperformance isn’t a matter of if but when. As a Baird study noted, “at some point in their careers, virtually all top-performing money managers underperform their benchmark and their peers, particularly over time periods of three years or less.”

Just imagine how nerve-racking this must be when it finally happens. Yes, you had skill in the past, but what about now?  Is your underperformance a normal lull that even the best investors experience, or have you lost your touch? Of course, losing your touch in any endeavor isn’t easy, but it’s so much harder when you don’t know if you have lost it.

I’m not the only one who has argued against stock picking either. Consider what Bill Bernstein, the famed investment writer, recently said about the hidden dangers of buying individual stocks:

The very best way to learn about the dangers of individual stock investing is to familiarize yourself with the basics of finance and the empirical literature. But if you can’t do that, then, sure, what you have to do is put 5% or 10% of your money into individual stocks. And make sure you rigorously calculate your return, your annualized return, and then ask yourself, “Could I have done better just by buying a total stock market index fund?” And pray that you don’t get really lucky, because if you get really lucky, you may convince yourself that you’re the next Warren Buffett, and then you’ll have your head handed to you when you’re dealing with much larger amounts later on.

It’s these kinds of risks that stock pickers may be overlooking without realizing it.

And, for the record, I have nothing against stock pickers, but I do have something against stock picking. The difference is crucial. Skilled stock pickers provide a valuable service to markets by keeping prices reasonably efficient. However, stock picking is an investment philosophy that has gotten far too many retail investors burned in the process. I have seen it happen to friends. I have seen it happen to family. I just hope it doesn’t happen to you too.

I know I won’t convince every stock picker to change their ways, and that’s a good thing. We need people to keep analyzing companies and deploying their capital accordingly. However, if you are on the fence about it, this is your wake up call. Don’t keep playing a game with so much luck involved. Life already has enough luck as it is.

Lastly, I do want to mention one selfish reason why I don’t buy individual stocks—doing so would go against the investment philosophy I preach on this blog. As I have written before, the problem with most financial advice is that the experts don’t always practice what they preach. They tell you to do X with their money while they personally do Y. It’s rich as I say, not as I do.

Well, I don’t want to be one of these people. This is why I currently have 94% of my investments in a diverse set of income-producing assets and I hold very little cash outside of my emergency fund. I am not waiting to buy dips. I am not trying to get lucky with a 10 bagger. But I am aggressively diversified.

More importantly though, I am not rich now, but I expect to be rich in the future. And I am going to do it by following the advice I write about on this blog. That’s it.

Yes, my advice will never sound as alluring as the high-flying world of stock picking. But do you want to know why? As Warren Buffett once told Jeff Bezos, “Because nobody wants to get rich slow.”

Happy investing and thank you for reading!

Source: https://ofdollarsanddata.com/why-you-shouldnt-pick-individual-stocks loaded 06.04.2021