For a *homeless person* to buy stocks with their extra cash instead of saving it in some kind of stable and easily accessible liquid form is insane advice
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Replying to @arthur_affect @TransEthics
This is basic econ logic, the marginal utility of a dollar gradually decreases as you get richer which means that it makes sense for people on the left hand edge of the chart to be extremely risk averse
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Replying to @arthur_affect @TransEthics
For a millionaire, a sudden market downturn cutting their net worth in half is a temporary storm they can ride out For someone whose life savings amount to only a few hundred dollars, this is catastrophic
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Lol so is that what you told the homeless lady? If she puts a stop loss order on her Ford shares at their original price it's now risk free?
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Yeah I understand what you're saying The fact that you can sell stock when the stock starts to go down - whether automatically or manually - has no impact on whether investing in stocks is "safe" or not You can do the same thing at a casino
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Many companies that make products people love go bankrupt, it happens all the time Genuine fundamental analysis of a business is a much more difficult and complex task than I think I'm capable of (which is why I don't pick stocks)
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Replying to @arthur_affect @TransEthics
What I consider to be the best risk mitigation advice is to invest in index funds with money you don't actually need and hold it for the long haul, ignoring the volatility and hoping for zero alpha, which means playing around with stop loss orders actually increases cost and risk
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But this can't possibly apply to the homeless lady's situation, unless you genuinely believe that her disability payments are all the money she actually needs and the money she makes collecting cans is extra money she can afford to play with (which is insane)
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