Wall Street Myths -- the Stock Market Today

Wall Street is not fair.


People think Wall  Street should be fair. Wall Street is not fair. Stocks are not fair. Stocks and Wall Street is a way for the smart to legally transfer money to themselves from the stupid. 
 
Good news – It is not necessarily a way for the rich to transfer money to themselves from the poor. There are plenty of rich investors transferring their money to smarter investors every day. 
 
So the solution is know what you are doing. Read "How to Find a Home Run Stock." Get a copy on Amazon. 



Volatility is good

People think volatility is bad. If you are a pension fund, or a retired person, sure, volatilty is bad. But if you are an individual investor looking to get rich quick, volatility is good – if you know how to use it.

If you don't know how to use it, read above where it says “Wall Street is not fair.”

Speculation is the only way to survive

Risk taking has a bad name with most investors because (1) they cannot afford to lose what they have, and (2) they do not know how to handle “risk.” 

 

First, if you cannot afford to lose, please do not play the game.

Second, the biggest gains are in the stocks considered to be the most risky – but you have to know what you are doing in them so that the risk is neutralized. As most investors don't know, they lose and give “risk” a bad name.

Mutual funds are good investments?

If you want the highest possible return, get in the one stock that is going up the most and play that one stock. If you want to make sure you have lackluster returns, get in such a large group of stocks that you do not outperform the market. 

 

So if you invest in a mutual fund, you are guaranteeing lower return that if you invest in a few high performing stocks. Most mutual fund under-perform the market.

 

Further, mutual funds have to sell when the public is bearish and demanding their money back from the fund and buy when the money rolls in from over-optimistic investors at the peak of the market. So they are engineered to buy at the top and sell at the bottom. I ask you, is this a good idea?

Buying stocks and holding them for the long term may not be good idea.

If you can buy cheap and sell high – and this is very hard to do – you can outperform the market by a long shot.
If you hold the right stocks for the long term, yes that is good. However, choosing those right stocks may be just as hard, if not harder, than timing the market.

The more you look at the market, the more you will start to learn that you have to know how to pick stocks to survive. Buy and read "How to Find a Home Run Stock." Click on the link on this page to buy it from Amazon.  Learn the basic mechanisms of the market and profit.