The Stock Market is Not Las Vegas

Below is a story posted on Twitter and the article from MarketWatch.  It’s a sad story, but often true.  I’ve been in the market for over thirty years, and I’ve seen it ruin friendships, wipe out people’s accounts, destroy people’s lives, and result in suicide.  Never trade on margin, or get into products you don’t completely understand.  You have to realize that you are up against sophisticated financial institutions and their machines that are trained to take every penny they can get.  They will win, and you will lose if you play their game.  There are many people and companies selling the next winning strategy or trading idea out there.  Over thirty years I’ve seen hundreds of them, and many are no longer around.  Institutions know this, and they put their funds with the brightest firms, yet they get duped at times also as evidenced by the likes of the Bernie Madoff scandal.  

The stock market was created as a vehicle to create liquidity for investing in corporate businesses.  It’s not a casino game.  Investing in a business takes skill and knowledge.  Just because you enjoy a business’s products doesn’t mean the business is on sound footing.  WorldCom is a good example of a business that no longer exists, because of management monkey business with their books that cost many investors loss.  If you don’t want to do the work to invest in businesses, and aren’t comfortable with the risk, then choose the market and ride in it’s boat, so you don’t have to concern yourself with the fear of the unknown.  If you choose this route you will need to understand market history as it is critical to keep you focused in times of volatility.

Lastly, get yourself an advisor or someone with a lot of past investment experience that is monitored by a governmental agency, so you don’t make stupid choices that cost you your hard earned money.  There are many authors that have shown that having an advisor adds value. Advisors keep people on track and away from their irrational behavior.  If you want to gamble go to Vegas, but don’t bring it home.

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