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Investing - A Rigged Crap Shoot
I am starting to think that the typical investor stands little chance against professional traders and Wall Street in general because unless a person devotes a lot of time to this, available returns are siphoned off by skilled traders and other denizens of Wall Street. I'm thinking this ends with a significant dilution of possible returns and thus it becomes decidedly disadvantageous for nonprofessionals to even bother.
And then there is this stuff going on that I suspect is only the tip of the iceberg.
http://news.cnet.com/8301-30684_3-10376993-265.html
Just my two cents.
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Try index funds
October 18, 2009 12:07 AM | Reply | Permalink
Yes, the have you either way.
If you try to swim with the sharks, you have to devote your entire life to it, and then you still need to get lucky to get good returns.
The alternative is to give your money over to "the experts", who will simply siphon off a little every day/month/year/trade, to pocket for themselves. Whether you make money or not.
It's a racket. Simple as that.
-- ARG
October 18, 2009 12:45 AM | Reply | Permalink
Capitalism in this country is controlled by one thing and one thing only:
SOFTWARE.
I am truly sorry I missed this TPC. I do not know how I missed it. I swear I remember recommending it. oh forget it.
No, the individual investor never really had a chance but he/she has none now. And since the tax structure makes you take your few extra dollars into the employee/er plan, you are screwed.
A lot of malaise. SEE BARTH'S
October 18, 2009 1:44 AM | Reply | Permalink
The individual investor CAN make money, but it takes a lot of time and effort, as well as the ability to survive sleepless nights. My husband spends probably 6-8 hours a day on the internet, researching and studying, watching trends, exploring options...often he is up at 3 am to catch the opening of foreign markets. It is really a part time (okay, closer to full time) job, but if you are good at it (and he is) it pays well.
Conversely, if you don't know what you are doing you can lose your ass (and your life savings!)
The market now is especially scary. There are no good, safe places to put your money. Interest rates are ridiculously low, but the stock market is no place for people who don't know what they are doing.
October 18, 2009 2:32 AM | Reply | Permalink
...who don't know what they are doing.
That is most of us. Myself included. It is by no mere coincidence it's this way. In many ways, the price of admission to play this game is steeper than most people can afford.
October 18, 2009 4:46 AM | Reply | Permalink
Casino gambling seems to be a far better regulated and lot less sleazy pursuit than does playing the markets on Wall Street. So someone please explain - at the end of the day - in what fashion a day trader playing options on oil futures contributes to the health of the economy or my ability to put a loaf of bread on the table. Or are we instead simply subsidizing gamblers to take their cut off the top before the real work gets done?
Not an economist here. Just asking questions.
October 18, 2009 5:06 AM | Reply | Permalink
The only problem with casino gambling is that the odds are rigged in favor of the house, and no matter how good you are, no matter how much you study, no matter how much you "know," over time, the house will win.
With the stock market, people who are willing to do the work, can come out ahead.
How does it benefit society? Ya got me! My husband has explained it to me over and over (something about having the ability to own small parts of a bunch of businesses) but my head can't grasp that it is anything other than legalized gambling, but with the gambler more in control of his fate.
October 18, 2009 1:58 PM | Reply | Permalink
I agree you shouldn't buy individual stocks unless its your full time job.
However, that doesn't mean you shouldn't buy well diversified equity and fixed-income mutual funds
October 18, 2009 2:16 PM | Reply | Permalink