Q: You've said that investors should stick with mutual funds and ETFs unless they have enough time to dedicate to their portfolio. How much time should an investor plan to spend on their portfolio if they're buying individual stocks?
There's no perfect answer to this question. It depends on your investment goals, as well as on factors like how fast you read and how quickly you can digest financial reports.
Having said that, here are some of the things you should make time for:
- Researching and evaluating potential stock investments.
- Reading quarterly and annual earnings releases from stocks you own.
- Reading the annual reports of stocks you own.
- Regularly reading recent news items concerning stocks you own. Most brokers have newsfeeds on their stock quote pages where you can find recent headlines, and I suggest checking these once per week or so.
- Learning more about investing. Nobody knows everything about stock investing, and the more you learn, the better-equipped you'll be to make smart decisions, and to do the rest of the tasks on this list more efficiently.
So try to estimate how long it would take you to check all of these boxes, and that's how much time you should spend.
If I had to put a number on it, I'd suggest allocating 5-10 hours per week to investing if you want to buy individual stocks, but there's one big caveat. The best advice I can give is to allocate a lot of time to the last task on the list: learning. It's extremely important for stock investors to continually build their knowledge, so prioritize it when allocating your time.