Tesla and Apple rallied after their stock splits earlier this month, but then took big hits. You also have to be able to make your moves at "just the right moment to capitalize on fluctuations in price," Roper said.
Losses are particularly likely in an economy that is as rife with unprecedented and unpredictable risks of the kind we face in a global pandemic that has decimated certain industries. That's because they "tend to be a little late to the party," said Andreas Parkassociate professor of finance at the University of Toronto and a co-author of the research.
For example, they might buy and sell stocks based on a news report that a company is filing for bankruptcy, whereas hedge funds and other larger investors have technology that allow them to trade on that information before most people have time to read it.
Park said this year's "explosion in day trading" is due in part to the financial desperation many are facing in the U. You don't need to be prophetic to reap decent returns.
You can simply invest in passive funds that track an index, like the Dow Jones U. Total Stock Market Index.
The median stock? In fact, people may up their odds of staying invested in index funds over a long period of time if they allow themselves a little limited fun with stocks, Boneparth said.
With that money, they can invest in individual companies.