Other financial publications may hate me for saying this, but the truth is most people shouldn’t buy stocks.
I want FutureMoneyTrends.com to be a name you can not only trust, but a company that has a direct impact on improving your life. This is why I felt it necessary to write this essay today – because even though we advocate stock ownership, it’s important to note that it’s not for everyone.
What I want to share with you today is the truth… the truth that most people shouldn’t own stocks. I don’t
know if you’re one of them, but if you are, this letter could be a major turning point in your life.
Wall Street has done a great job of convincing everyone that the only way to retirement is through stock (commission fee-based) investing.
They push the idea that in order to make an investment, you need to speak with a licensed financial planner or broker. But this just isn’t the case.
The truth is most people are just gambling when it comes to the stock market.
If you own stocks and have no idea what’s behind those businesses — their operations, cash flow, and basic business model — then you should really consider selling them. Have respect for your own money. Don’t just blindly throw money at a mutual fund, ETF, or the stock pick of the week on CNBC.
Not having any interest in the businesses is why the real average stock market return is 2% – not the 12% claimed on the brochures at your local brokerage company.
Gamblers buy high and sell low; it’s in our human DNA.
When given the choice, we prefer to go with the crowd, finding safety in numbers, which wreaks havoc in our portfolios.
The best reason for people not to own stocks is that there are just too many other great alternatives. There’s real estate, businesses, corporate bonds, whole life insurance dividends, trust deeds, and other investments that are far more stable.
Liquidity in the stock market is both our best friend and worst enemy. It’s amazing that I can buy shares of Apple with the click of a mouse, but it’s a curse that I can sell them the second my emotions take over my decision making.
One of the biggest mistakes every investor makes is the feeling that they need to reallocate capital the moment it hits their checking account. The best investment will always be in what is making you money right now. For most people, that’s their job or business. If you can’t invest more there, then save your money.
Only buy stocks if you are willing to take the time to learn about stock market investing – otherwise, you are really just gambling.
It’s important for you to realize that you don’t have to own stocks. They aren’t your only option for building wealth.
And when it comes to these junior resource stocks, you’re either partnered with the very few people who are going to make you and themselves money or I can almost guarantee you that you’re going to lose money!
The legends and good guys in the resource sector are few and far between. For the most part, the sector is made up of professional gamblers who profiteer off of the non-professional ones (retail investors).
Just like you wouldn’t jump into a poker tournament with the pros, you shouldn’t be speculating in the micro-cap space like an amateur. Instead, you back the pros, you stand behind them, making them your partner, and let them do the work, delivering the big returns.
Next week, we will be releasing an extremely important report on gold. It’s going to give you an opportunity to profit from the mining space, however, I want to be clear that if you think the price of gold is going to go up, then you should buy gold.
The mining shares are a completely separate investment that require the liquidity and ability to stay the trade. Otherwise, it really is best to just avoid it altogether.
Never feel like you have to do anything with your money. It’s your money, and you are always going to be its biggest defender.