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Florida Today: Why Chasing Big Scores Backfires in Investing

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  //stocks-investing.news-articles.net/content/202 .. y-chasing-big-scores-backfires-in-investing.html
  Published in Stocks and Investing on Friday, November 21st 2025 at 6:27 GMT by Florida Today

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Summarizing Florida Today’s Take on the “Big‑Score” Investing Craze

Florida Today’s November 21, 2025 feature, “Constantly searching for big score isn’t a great investment strategy,” dissects a prevailing myth in personal finance: that the quickest way to wealth is to chase the next big market boom. The column, written by local finance columnist Mark Davis, argues that the pursuit of high‑risk, high‑reward opportunities—whether in tech startups, crypto, or speculative stocks—tends to backfire over the long haul. Below, we distill Davis’s key points and explore the supplementary links that deepen the article’s analysis.

1. The Allure of the “Big Score”

The piece opens with vivid anecdotes from recent years: the meteoric rise of Bitcoin in 2017, the frenzy over non‑fungible tokens (NFTs), and the “boom” of SPACs in 2020. These events fuel a narrative that investors can strike it rich overnight. Davis points out that media coverage often celebrates early‑adopter winners, while the vast majority of participants experience modest or negative returns. The article links to a Bloomberg analysis of SPACs that shows more than half of those initial deals underperformed their benchmarks within two years.

2. The Psychology Behind Over‑Trading

Davis draws on behavioral finance research, citing a 2019 study by the University of Florida’s Department of Economics that documents how the excitement of potential big wins can trigger “over‑trading” – buying and selling frequently to chase short‑term gains. Over‑trading erodes returns in two ways:

1. Higher transaction costs – brokerage fees, bid‑ask spreads, and commissions accumulate quickly.
2. Tax drag – short‑term capital gains are taxed at a higher rate than long‑term gains, eating into profits.

The article links to a page on the IRS website that explains the difference between short‑ and long‑term capital gains, reinforcing the argument that investors should be mindful of tax implications.

3. The Myth of Market Timing

The column argues that even seasoned professionals cannot reliably time the market. Davis cites the 2024 “buy‑the‑dip” strategy that many retirees used after the pandemic crash, only to miss the subsequent rally. A link to the Federal Reserve Bank of St. Louis’s research notes that attempts at timing often result in lower average returns than a simple buy‑and‑hold strategy.

4. Diversification: The Antidote to Big‑Score Fever

A central thesis of the article is that diversification can mitigate risk while providing steady growth. Davis outlines three layers of diversification:

• Asset‑class diversification: stocks, bonds, real estate, commodities, and cash.
• Geographic diversification: U.S. markets, international developed markets, emerging markets.
• Style diversification: growth, value, dividend‑yielding, and momentum strategies.

The piece includes a link to a financial‑planning resource from Florida State University’s College of Business that explains how these layers interact to smooth portfolio volatility.

5. Dollar‑Cost Averaging (DCA) Over “Big‑Score” Surprises

Davis promotes dollar‑cost averaging as a disciplined way to enter markets regardless of price fluctuations. He recounts a case study of a retiree who invested $500 monthly into a diversified ETF and, over 30 years, achieved a 7% annualized return—outpacing any speculative bet he tried over the same period. The article links to a Vanguard guide on DCA, which provides a step‑by‑step framework for beginners.

6. The Role of Asset Allocation and Risk Tolerance

The article highlights the importance of aligning asset allocation with an individual’s risk tolerance, time horizon, and financial goals. Davis references the “Risk‑Return Trade‑Off” model and includes a link to a Florida Department of Financial Services’ interactive tool that helps residents build a custom allocation model.

7. Real Estate vs. Stock Market: A Florida Perspective

Given Florida’s unique real‑estate market, Davis examines how property can be a stable, inflation‑hedged investment. He cites data from the Florida Realtors Association, showing that, on average, residential property values have appreciated 4–5% annually over the past decade—competitive with diversified equity funds. The article includes a link to a recent study from the University of Miami’s School of Real Estate, which discusses the benefits and pitfalls of Florida’s housing market for long‑term investors.

8. Tax‑Efficient Investing

The piece emphasizes tax‑efficient vehicles such as 401(k)s, IRAs, and Roth accounts. Davis links to the IRS “Retirement Account Tax Guide,” which explains how tax deferral or conversion can impact long‑term growth. He warns that “big‑score” trades, especially in taxable accounts, can trigger significant capital gains taxes that erode net returns.

9. A Balanced View: When Speculation Can Fit

Davis does not dismiss speculation outright. He concedes that a small, carefully chosen allocation (e.g., 5% of a portfolio) to high‑growth, high‑risk assets can add upside potential, provided the investor has the risk tolerance and time horizon to absorb potential losses. The article links to a case study from the University of Central Florida’s Risk Management Department that shows how a balanced portfolio can benefit from both safe and speculative assets.

10. Takeaway: Patience Pays Off

The article concludes with a succinct reminder: “Investing is a marathon, not a sprint.” Davis urges readers to adopt a long‑term view, embrace diversification, and resist the temptation to chase the next big headline. He offers a free “Investment Readiness Checklist” (link included) that helps readers assess their current strategy and identify areas for improvement.

In Summary

Florida Today’s column presents a cogent argument against the “big‑score” investing myth, backed by behavioral research, tax considerations, and practical portfolio construction techniques. By weaving in additional resources—from IRS tax guides to university research—it provides readers with a robust framework for building a sustainable, long‑term investment strategy that prioritizes steady growth over flashy gains. Whether you’re a seasoned investor or a new saver, the article reminds us that disciplined, diversified, and tax‑aware investing tends to be the wiser path to financial security.