Ben Carlson on Why It’s Better to Avoid a Strikeout Than to Swing for a Home run
4/19/202624 min
We at The Motley Fool are proponents of investing in individual stocks. But does that result in betting your financial future on too few companies? In this second of a two-part conversation, Motley Fool Senior Advisor Robert Brokamp speaks with Ben Carlson about the risks of investing in individual stocks, market valuations, balancing saving for the future vs. enjoying life today, and the career advice we give our kids. Ben is the Director of Institutional Asset Management at Ritholtz Wealth Management, the writer behind the “A Wealth of Common Sense” blog, the co-host of the Animal Spirits podcast, and the author of “Risk and Reward: How to Handle Market Volatility and Build Long-Term Wealth,” which will be available on May 12. Listen to our April 18 episode for Part 1 of this conversation. Host: Robert Brokamp, CFP®, EAGuest: Ben Carlson, CFAEngineers: Lauren Budabin, Bart Shannon Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement.We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode.Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices
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First 90 secondsBen Carlson· Guest0:00
[upbeat music] They've been beat over the head for so many years and decades of people telling them, and people like you at The Motley Fool, and there's people like me in a blog, "Hey, when stocks go down, you don't run out of the store because they're on sale. You rush in to buy." And it seems like people have actually learned. And so I, I make the case all the time that I think investor behavior has actually gotten better over time.
Robert Brokamp· Host0:21
[upbeat music] That was Ben Carlson, author of The Wealth of Common Sense blog, co-host of the Animal Spirits podcast, and the author of the upcoming book, Risk and Reward: How to Handle Market Volatility and Build Long-Term Wealth. I'm Robert Brokamp, and today is part two of my conversation with Ben, during which we discuss the risks of investing in individual stocks, market valuations, balancing saving for the future versus enjoying life today, and the career advice we give our kids. [whooshing] We've been talking about the performance of broad asset classes here, right? Which you can get exposure to through a low-cost index fund. But what about individual stocks, which a lot of our listeners own? Because even though the US stock market has always recovered from every downturn, not every stock does. How do you approach investing in individual stocks?
Ben Carlson· Guest1:15
Yeah. A- and I highlight the work of Henrik Bessembinder in here, and he's a professor at the University of Arizona State, and he talks about the fact that over the long haul, the concentration of the US stock market is probably more than you think. His, his definition of long-term is even longer than mine, probably. He's looking at, like, a hundred years of data,