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Technology Stocks : WDC/Sandisk Corporation
WDC 181.54+1.1%Dec 26 9:30 AM EST
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To: Artslaw who wrote (20914)10/2/2001 9:27:22 AM
From: Art Bechhoefer  Read Replies (1) of 60323
 
Steve, the individual investor must do two things:

1. Be willing to spend enough time studying company fundamentals in order to make well informed decisions.

2. Have an investment theory or objective that meets the individual's own unique goals.

The second point is most important because it really says that what may be a good investment for some people or institutions is NOT a good investment for others. For example, a fairly risky tech stock isn't the right kind of investment for those in low tax brackets or those who do not regularly report capital gains. The reason of course is that a speculative investment that results in a loss can be compensated for in part through tax deductions, but only if the individual has a high enough tax bracket for that to make sense.

So, to put it another way, a recommendation coming from a brokerage firm or major investment house, no doubt publicized AFTER the firm bought or sold for all its clients, is self serving, and in any event may deal with securities that don't begin to meet the individual's investment objectives. If an individual doesn't have the time or the interest in carefully researching stocks and other securities, then the smartest thing for the individual to do is rely on mutual funds or similar investment tools. This will often mean doing no better or worse than the market in general (particularly if the investment is in an index fund), but it is the only alternative open to those unwilling to spend the time to study alternative investments.

Art
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