Active Investing?

I will admit it… I love investing. I know for a fact about 10 million other people will agree with me and think that investing is an amazing thing. Granted there are probably about 5 Billion people that could care less, but as our teacher always says, “This stuff is awesome and exciting”. Granted that he usually is talking about efficient markets, or monopolies, but I feel the same can be said about investing. Much like gambling you have the chance to find that stock that will triple in price overnight, or you overhear someone talking about the new pharmaceutical drug that will be released through Pfizer. There is so much involved with investing it is easy to get overwhelmed when you are not doing the “boring” buy and hold strategies our book describes.

I started my interest in finance learning everything I could about active investing; essentially timing the market and watching charts that will make your eyes bleed. If you want to shorten your life from stress, I strongly suggest becoming a day trader. I had several talks with different investors and even teachers about strategies and what routes they follow. We even have a teacher that treats active investing like its witchcraft, frowning at any student that shows interest in it (I strongly believe that this is an example of someone who used it for years and saw the unfortunate ups and downs that are associated with active investing). Being a young student who is “smarter” than everyone else I denied most advice and thought they just did not know what they were doing. I could make money in the market using active investing because I know stuff that others do not. I cannot count the times that our professor has told me that the prices are sitting at what they are for a reason. If you disagree with the market price (and are correct) you are well on your way to becoming a millionaire. Sounds easy right? Well be my guest. In my short interest in finance and investing I have quickly realized that active investing is not for me. You better be ready for 40 hours a week of analyzing charts and data, followed by a strong stomach to accept the ups and downs of the market that can happen daily. From what I read in our book this semester is some of the best advice I have read in any books dealing with finance. It is a short chapter that touches on every question I had and even touches on active investing. In that short chapter, I feel that I have lost almost all faith in active investing. If you have any interest in Finance I would strongly suggest reading that chapter again and adopt some of its suggestions, I know I will be.