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I do not actively trade any stocks or bonds on the public markets. I've also avoided cryptocurrencies, which trade on a public market.
I avoid public market trading for a couple of reasons:
1) It's been empirically shown that holding a diversified portfolio of investments for a long period of time is a better strategy than attempting to identify individual stocks that will outperform the market. This is because any additional gains you get by actively trading, on average, will be canceled out by the value of the effort put into achieving those gains. This leaves you, the average person, no better off than just passively holding diversified investments over a long period of time. Weathfront has a great explanation of why this is the case: in this blog post.
2) It's stressful. At any given time you could be doing better if you had more information on the companies you are trading. At any given time you could be doing better if you buy and sell at just the right time. At any given time... When actively trading this constantly was in my head, I became obsessive about research. This was emotional stressful. While probably not applying to everyone, it is not worth the stress to me.
3) Success attribution. It's really difficult (or maybe impossible) to identify the signal of why certain stock picks performed well and why others performed poorly. Which would be necessary to consistently pick well-performing stocks.
If you want to be investing more of your money but don't know where to start, I recommend checking out Wealthfront. They give you very good diversification without any fees on your first $10k, they encourage good long-term thinking, and they are not paying me to say any of this. Investing is important to wealth building, and active investing is one of the traps many first time investors will get caught in.
It would be disrespectful not to mention Jack Bogle, founder of Vanguard investments, who pioneered bringing low cost diversified investment instruments to regular investors. Before Vanguard, if you wanted to match the performance of the S&P 500 you would need to buy every stock in the S&P 500. Vanguard created the first widely available index funds. By doing this Vanguard democratized access to index investing, by lowering the cost and complexity of making index investments. This gave regular people access to sophisticated investing techniques. What Wealthfront does is the modern continuation of these ideas, with added features such as Tax-Loss Harvesting and Automatic Rebalancing.
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