Automatic Monkey said:
What you're saying is partially correct, that a fund manager has restrictions placed on him by higher-ups, but those restrictions are there for a reason. If any one of your stocks crashed (and eventually, one or several of them will) you will probably be taking a loss for the year. Day-trading is much like progression betting in that you can make small profits for a long time, just hope the Big One doesn't hit, and we all know it eventually will. Brokerage fees are significant for small investors too, much like the rake in a low stakes poker game.
Your paradigm of investing is a legitimate one, however I think you might have the advantage miscalculated relative to the volatility (think bet sizing as a function of advantage and variance.) In contrast my fixed income portfolio steams along and pays me hard cash every quarter which doesn't require me to do any selling and is mine to keep forever even if the issuer goes bankrupt. Plus preferred stock investors get generous margin terms, and margin + fixed income = arbitrage... free money.
While I appreciate your postion,let me clarify a few things.
I don't day-trade.In fact I can't. Both of my trading accounts are set so I'm getting information twenty minutes behind,just to avoid such temptation.
My account gives me 6 free purchases a month and cost me $12.95 to sell a stock.Most of my activity is in my IRA so no taxes are due,and every stock I own has a stop-loss on it.Much of my growth comes from reinvesting divedends-I was given shares of Pepsi,Sears and Xerox in 1965 and have been reinvesting since then,although I am no longer holding any Pepsi,just its Yum offshoot.
While my advice wouldn't fit everyone,remember it was offered to a 20 year old that has a long,long way until retirement and can easily recover from the occasional stumble.No way in the world should someone with 40 years to go be buying any sort of bonds.
First you build the nest,then you protect it.
