Summary: With our live shows done, we wanted to discuss a theme that came up over and over again in our listener Q&A and conversations afterwards. It’s a question both of us had when we started investing and it is one that can lead a lot of people to put investing in the ‘too hard’ basket. That question is - how do I pick the perfect stock? It’s a question that professional investors struggle to answer - even Warren Buffett had his IBM moment. Importantly, it is one that can get new investors lost in a sea of jargon, ratios and charts. So in this episode we explain why new investors should forget stock picking and explain how achieving market average returns over a long time period is all you need. In this episode you will learn: Why stock picking is the wrong focus for new investors The three things that investors should focus on instead - reducing the costs you can control, diversifying and asset allocation How both of us think about stock picking v market average returns Stocks and Resources Discussed: The Economist - Fund managers rarely outperform the market for long Slater and Gordon (ASX: SGH) A2 Milk (ASX: A2M) Bellamy’s (ASX: BAL)
