Editor s note: A version of this article first appeared in June 2020.
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I once created quite when a stir when I wrote the following on Twitter: I ll say it: Individual stocks are TERRIBLE investments for people just starting out. I know that many people learned about investing through their Disney shares yadda yadda but I think we need to be clearer about this when we discuss financial education. So much ink has been spilled discussing the failings of active managers. But we haven t talked enough about how poorly many small investors are apt to do with individual-stock purchases, especially if they re just learning. Now seems like a good time to drive home this point.