Final answer:
Your investment portfolio is likely to perform better than your friend's due to your diligent monitoring and strategic approach. While the market is unpredictable, being informed allows you to navigate it more effectively, whereas your friend's random and uninformed method may lead to underperformance.
Step-by-step explanation:
The performance of your investment portfolio in comparison to your friend's portfolio will likely differ significantly due to the approaches taken by each of you. As someone who monitors selections, tracks prices, and stays informed about current events and company actions, you possess a strategic advantage. This diligence allows you to make educated decisions and adjust your investments in response to market conditions or corporate changes. On the other hand, your friend’s portfolio, built on random selections without regard to financial news, is much more subject to the whims of the market. While there is always an element of unpredictability in stock investments, a lack of information and strategy generally leads to poorer performance.
Since your portfolio strategy is based on active management and engagement, you have the potential to protect your investments from unforeseen downturns and take advantage of opportunities as they arise. Conversely, your friend's passive and uninformed approach might miss out on both protecting against losses and capitalizing on gains. However, it is also important to note that the stock market can be unpredictable, and even well-researched investments can underperform. Diversification is recommended as it can help mitigate the risk associated with investing.