Make money by staying away from the Stock Market - the biggest fraud of the 20th Century? A confession of the former day-trader
A friend of mine was kind enough to share his 'investing in stocks' and day-trading experience. I find it useful and alerting for all of us, and here it is in a brief version.
"Want to make money? I have a simple solution for those of you who have some spare cash to spend. Simply don't play on the Stock Market, and you'll save much more money than you could ever make on stocks. And your savings will come with benefits - no sleepless nights, no worries, no time wasted on so-called "stock research" and no extra accounts to maintain. Instead, invest your time in searching for true investment opportunities of the current times, whichever it might be, the real estate, gold, or anything else.
I speak from my personal experience and from the personal experiences of at least 7 people I know. In July of 2001, right before the stock price increments changed from fractions to decimals, I got out of the Stock Market, after day-trading and gambling on long-term positions for almost 3 years. Only five(!) years later, in 2006, I realized that I made one of the best decisions in my life. But that day in July I was standing exhausted, with a huge cash loss on hand, only watching my other friend making a killing on Real Estate. He never gambled on stocks. Later that year, while my friend was enjoying his Real Estate profits in French Riviera, I was spending 5 nights in a row, recording my every buy/sell transaction for tax purposes. What a nightmare that was. The only 'benefit' I got is the ability to write off stock market losses for the next 10 years.
The simple truth to Stock Market is - in order for big investment firms to gain, millions of small investors must loose, and that includes you and I, and everyone you and I know. Yes, I was gaining up to $5,000 a day on some days day-trading, and yes I had many successful long-term picks, and yes I was disciplined and I was doing my 'research' ..., but at the end I lost it all just like all of the so-called 'small stock market investors' that I know.
When Market goes up, everyone makes money and sure everyone is a genius. When Market goes down, mainly small investors loose. Market never forgives your dilletancy and unpreparedness. No matter how successful, disciplined, detail-oriented and resourceful you are, you will loose or make peanuts on the Stock Market in the end. You cannot 'research it' - you need to have a staff of trained intellectuals to do that. You cannot predict it - no one can. You cannot control it - it's a gamble for a small investor. You cannot 'hedge' it with short sells or option straddles like the option traders do - leave this to professionals or you will loose your shorts on options. Truth to be told - your time and money can be spent much more productive on some other, true investments, those that you have control of.
In comparison with 'investing' in stocks, simply saving money is a better way of 'investing'. Now, it makes me laugh seeing people tracking their stock market 'gains' on their websites. As a matter of fact, it makes me laugh seeing someone 'investing' in stocks.
It pleases me to see my savings grow. I'm saving to make some true investments, those that I can control. I will likely invest into Real Estate, as the buyer's market has just begun. Real Estate is real, it is there, it is insured, and if properly managed, gives you cash flow and hopefully appreciates a little in value each and every year. Plus, and this is a huge plus, it gives the best tax write off out there, and depreciation which is another form of income. And just like gold, it has never loses the entire value."
Sun Feb 4, 2007 01:02PM | Copyright: www.bad-credit-advisor.com | More in Personal Finance | Comments (0)
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