If you have read any of my articles about stock market investing, you know that I am big fan of learning how to invest in the stock market on your own.
I was talking to a friend of mine today whose dad had over a million dollars invested.
The brokerage sold to another company and his funds were transferred to another advisor.
This happened again and his account was transferred to yet another broker.
You would think that with a million dollars in an investment account, you would get a phone call from the broker assigned to your account.
Over one year's time, no one called.
What does this tell me? It tells me that even with an account size of over a million, it doesn't even warrant a phone call.
It tells me that if you think your broker is sitting there analyzing how you can earn more money from your investments, you are probably mistaken.
This also explains why so many people lost so much money in the last bear market.
Stock brokers are not doing their job.
It also tells me that if you ever need someone to let you know when to sell your assets in a market downturn, it's not going to happen.
It means you will eventually lose money.
What does this mean if you have only a $100,000 investment portfolio? It means that you are in the same boat as the my friends dad.
This is a lousy way to make money investing in the stock market.
You see, most people are told that it is always a good time to buy stocks.
Investment advisors will always tell you you should be in the market because over the long term, the stock market has performed better than any other investment like bonds or cash.
While this probably remains true, you shouldn't buy and hold stocks forever.
Even the best stocks decline in value.
This is because when institutional investors buy stocks, the stock price goes up.
When they sell, it goes down.
This impact is caused by the rule of supply and demand.
The more demand, the higher the price..
The lower the demand, the lower the price.
When your stock values are going up, it means they are under accumulation.
And, it's most likely caused by institutional investors buying the stock you are invested in.
When they've made their money and move onto another stock, what do you think happens to the price of your stock? It goes down.
The real question is this.
Why ride the price down? The answer is you don't have to.
But if you remain with a broker like my friend's dad, you are almost guaranteed they won't call you to advise you to sell -- ever.
This means you will lose in that stock eventually.
In order to prevent this, you've got to be an active manager of your investing funds.
With some study and practice, you can learn to do as well as your broker.
If you don't believe me, ask the people who lost half of their account value in the last bear market.
Anyone can lose half the value of their own account.
You don't need to be a professional to do that.
Don't you think you can do that well? I think so too.
I was talking to a friend of mine today whose dad had over a million dollars invested.
The brokerage sold to another company and his funds were transferred to another advisor.
This happened again and his account was transferred to yet another broker.
You would think that with a million dollars in an investment account, you would get a phone call from the broker assigned to your account.
Over one year's time, no one called.
What does this tell me? It tells me that even with an account size of over a million, it doesn't even warrant a phone call.
It tells me that if you think your broker is sitting there analyzing how you can earn more money from your investments, you are probably mistaken.
This also explains why so many people lost so much money in the last bear market.
Stock brokers are not doing their job.
It also tells me that if you ever need someone to let you know when to sell your assets in a market downturn, it's not going to happen.
It means you will eventually lose money.
What does this mean if you have only a $100,000 investment portfolio? It means that you are in the same boat as the my friends dad.
This is a lousy way to make money investing in the stock market.
You see, most people are told that it is always a good time to buy stocks.
Investment advisors will always tell you you should be in the market because over the long term, the stock market has performed better than any other investment like bonds or cash.
While this probably remains true, you shouldn't buy and hold stocks forever.
Even the best stocks decline in value.
This is because when institutional investors buy stocks, the stock price goes up.
When they sell, it goes down.
This impact is caused by the rule of supply and demand.
The more demand, the higher the price..
The lower the demand, the lower the price.
When your stock values are going up, it means they are under accumulation.
And, it's most likely caused by institutional investors buying the stock you are invested in.
When they've made their money and move onto another stock, what do you think happens to the price of your stock? It goes down.
The real question is this.
Why ride the price down? The answer is you don't have to.
But if you remain with a broker like my friend's dad, you are almost guaranteed they won't call you to advise you to sell -- ever.
This means you will lose in that stock eventually.
In order to prevent this, you've got to be an active manager of your investing funds.
With some study and practice, you can learn to do as well as your broker.
If you don't believe me, ask the people who lost half of their account value in the last bear market.
Anyone can lose half the value of their own account.
You don't need to be a professional to do that.
Don't you think you can do that well? I think so too.
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