You Can’t Beat the Market—But I Tried Anyway
"You can’t beat the market." Every self-proclaimed finance guru, every book on investing, and every smug index fund bro on the internet repeats it like gospel. And they’re right—sort of. The idea is simple: trying to out-trade the market is a fool’s errand, while long-term investing almost always wins. I believed it, too. Still do.
But when my income as a freelance writer evaporated practically overnight, I found myself breaking my own rules. What followed was a year-long experiment in day trading—a journey that seemed lucrative at first but left me questioning everything by the end.
When AI Took My Job, I Took My Chances
I spent years making a solid living as a freelance writer, only for AI to swoop in and rip the rug out from under me. Clients vanished, rates plummeted, and "we’re using ChatGPT for this now" became the standard rejection email. My income dried up fast. Left with limited options and a chunk of savings, I did something desperate: I started trading stocks.
At first, I dipped my toes in—if you can call $10,000 "dipping." I made small moves, trading conservatively. But as I gained confidence, I invested more. By year’s end, my realized profits stood at nearly $18,000. Not bad, right?
I thought I had outsmarted the market. I thought I had cracked the code. Until I did the math.
The Cost of Trying to Win
The market rewards patience, and I had none. If I had simply bought my initial investments and done literally nothing—no selling, no checking, no overanalyzing—I would have made $21,000 instead of $18,000.
Here’s how the numbers shook out after repeatedly buying and selling my first few investments:
NVDA – $2,715
COST – $1,230
SPMO – $788
IVV – $155
SPHQ – $174
But had I held those positions instead of churning through 100+ trades, they would’ve grown by:
NVDA – $10,892
COST – $3,990
SPMO – $3,418
IVV – $1,299
SPHQ – $1,029
That’s a $20,628 from not touching my portfolio.
And the kicker? Taxes. Short-term capital gains tax (since I sold before a year) for my tax bracket: 12%. On my $18,000 profit, that’s a $2,160 tax bill. If I had just held those stocks, long-term capital gains tax? Zero. That’s one of the tax tips that would have helped keep more money in our pockets.
So not only did I make less money, but I also owed the IRS a nice chunk of it.
Knowing When to Hold and When to Fold
No matter the strategy, investing and trading both come with gut-wrenching losses—unrealized or not. I watched my portfolio dip by thousands more times than I care to remember, and it took everything in me not to panic sell. That’s part of the game, though. The market will (usually) recover, and patience is often the best move.
But not always. Some stocks are doomed, and waiting for them to "come back" is just wishful thinking. Case in point: I bought into cannabis stocks back in 2021. They tanked hard, and I lost thousands before I finally pulled the plug. Had I held on, hoping for a miraculous recovery, I’d be sitting on even bigger losses today.
So, how do you know which investments are worth holding?
Picking Long-Term Winners
The best strategy? Diversification.
Exchange-traded funds (ETFs) can be great tools for spreading out risk, but it’s important to check their holdings to make sure you’re actually getting variety. Many ETFs own the same big-name stocks, meaning you’re just replicating your exposure instead of minimizing risk.
But don't just buy multiple ETFs that all hold the same stocks. That’s called fund overlap, and it can leave you thinking you’re diversified when you’re actually just doubling down on the same bets.
A good rule of thumb: use ETF comparison tools like etf.com to check for fund overlap before investing. True diversification means holding a mix of sectors, industries, and asset classes—not just multiple funds with Apple, Microsoft, and Nvidia at the top.
The Magnificent 7: A Reliable Bet
If you don’t want to leave your money in the hands of ETF managers, the "Magnificent 7" stocks are a strong alternative. These seven tech giants earned their nickname because they’ve dominated the stock market in recent years:
Apple
Microsof
Amazon
Nvidia
Tesla
Google (Alphabet)
Meta
They’re in so many ETFs and portfolios because they deliver consistent growth, strong financials, and industry leadership. Their influence is so significant that their performance often dictates the broader market’s movements. While no investment is risk-free, these seven companies have a proven track record of bouncing back from downturns and continuing their upward trajectory.
Some Additional Stocks I Like
Beyond ETFs and the Magnificent 7, I have a few individual stocks I personally like. These picks align with my own investing philosophy and long-term vision.
FRPT (Freshpet, Inc.) – Consumer Defensive, Packaged Foods, Small-Cap
DKS (Dick’s Sporting Goods, Inc.) – Consumer Cyclical, Specialty Retail, Mid-Cap
BOOT (Boot Barn Holdings, Inc.) – Consumer Cyclical, Apparel Retail, Mid-Cap
COST (Costco Wholesale Corp.) – Consumer Defensive, Discount Stores, Large-Cap
WMT (Walmart Inc.) – Consumer Defensive, Discount Stores, Large-Cap
PG (Procter & Gamble Co.) – Consumer Defensive, Household & Personal Products, Large-Cap
KMB (Kimberly-Clark Corp.) – Consumer Defensive, Household & Personal Products, Large-Cap
NOW (ServiceNow, Inc.) – Technology, Software—Infrastructure, Large-Cap
GE (General Electric Co.) – Industrials, Specialty Industrial Machinery, Large-Cap
AMD (Advanced Micro Devices, Inc.) – Technology, Semiconductors, Large-Cap
Refining My Approach: Set It and Forget It—With Safeguards
While I’ve learned that patience pays off, I’m not just blindly holding my investments without a plan. The market sees a lot of ups and downs, and I want to balance long-term gains with risk management. That’s why I’m implementing stop-loss orders as part of my strategy.
Once a holding reaches a certain ROI—let’s say 2%—I’ll set up an automatic sell order if it drops to only a 1% ROI. This way, I can let my winners ride, but I won’t let gains completely vanish if the market takes a sudden downturn. It’s about patience with protection—giving my investments the chance to grow while ensuring I don’t take unnecessary losses in the case of a market correction.
So, this is not an approach to take if you invest with borrowed money (margin trading).
Disclaimer: I’m Not Your Financial Advisor
This isn’t financial advice. I’m not a financial professional—just someone sharing my own investing experience, successes, and mistakes. Do your own research, consult with a professional, and make investment decisions that fit your own risk tolerance and financial goals. If you lose money, that’s on you, not me.
