I fully believe those people who own a lot of individual stocks (say 100+) also invest in index or popular mutual funds in their portfolio.
They own a lot individual stock for a reason such as, they are not available in their index fund.
Investing in Individual stocks could be just be used for swing trading not for long holding. A few home grown which are not part of the index fund might be for long term holding if they have seen exponential growth potential.
100 though? How can you keep track of all that even for swing trading. I used day trade CFDs a lot but only ever stuck with the same 10 stocks. I couldn’t handle any more.
I have 150+ most of the time. I also own cryptos and Commodity (mainly gold). But I still own index funds
I do not spend much time tracking them. My tools are
People who have been doing this for sometimes must have beaten the performance of their other funds. Otherwise, there is no point of doing that, if they could simply ask other people to that for a very small fee as low as 0.07% (e.g VUSA.L)
Peter Lynch argues and strongly believes that individual investors have a distinct advantage over fund managers as they could invest in the stock which many fund managers cannot invest due to restriction put on them.
Good exampales on this are:
Betting on posibility of short squeeze to happen such as AMC, GME and recently BBIG, SPRT, investing in high growth small cap stock before it they are getting attention by hedgies.
But how do you find the time to monitor 150 stocks? All the YouTube and reddit in the world can’t buy you time. Even if we go conservative and say you spend 15 minutes a month looking up news on each, that is 37.5 hours or basically a full work week.
If your response is going to be that you don’t look at them at all, then my question is why risk your money like that?
I’m not having a go at you, each to their own, but I just can’t get my head around it.
Without sounding harsh, I would say that 150+ seems like either FOMO, or lack of decisiveness.
Unless of course it’s literally your full time job.
I do agree. When I used trade CFDs, I always stuck with the same 10ish stocks, and it really felt like a full time job. The second 14:30 came around I was on my phone constantly. I know investing is a different ball game, but I’m assuming you’d want to give minimum 15 mins a month reading thw news on your stock choices! It’s just not possible with a huge amount.