Since discovering the value of income investments, I've been amazed how many people think it's possible to know where the market is headed, or which individuals stocks to buy.
The Secret of Beating the Market Would Be Worth Trillions of Dollars
It's amazing -- because it revealed such a profound ignorance of how financial markets work -- or even more profound arrogance. That's disturbing. I hope that most people who think it's possible are young adults. Their ignorance is forgivable, because public schools are utter failures at teaching the basics of personal finance.
Novice investors must first of all realize the financial markets are HUGE. A lot of money is at stake. If anybody knows how to successfully time the markets or pick market-beating stocks, they're not going to tell you, and especially not on a public website.
Billions are Spent Trying to Gain Tiny Market Advantages
There are people, hedge funds, companies and institutions that have billions of dollars to spend trying to beat the market. They have huge databases of historical prices, large data centers hosting many servers, staffs full of Ph.Ds in Math and Finance, real-time monitoring of exchanges around the world, and custom software with proprietary formulas.
If it's possible to predict the market or find the best stocks, who do you think has a better chance? You -- or the professionals?
I don't care how smart you are, how good your grades are, how much math you know, or even how much money you've already made. You can't compete with such professionals.
If there's a market discrepancy somewhere, their computers are going to find it, put in the order to exploit it (at a much lower commission than even your deep discount broker gives you), and move on while you're still staring at your Trade Station screen.
As one prominent professional has said, "If you have to click a mouse," you've already lost.
The Future of the Stock, Bond and Currency Markets Is Unpredictable
But take comfort in knowing the future cannot be precisely predicted. The federal government insists that investment advisers add the phrase, "Past performance is no guarantee of future results" to all their ads, and those are the truest words the government has ever uttered.
Those fancy dancy professionals can usually make a lot of money, but sometimes they're blindsided by something that happens all their fancy algorithms didn't foresee. For more information, read Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets and The Black Swan by Nassim Nicholas Taleb.
Sorry, But No Matter How Much This Upsets You, NOBODY Knows the Future
It's psychologically disturbing to us, but we just can't know the future. We seek the comfort of thinking that we do, or at least that SOMEBODY does, and so we believe many stories that sound good, or at least plausible. We believe the stories we want to believe.
Sometimes we believe the stories about the market going up, sometimes the opposite. Until the future arrives and is the present, we can't know.
Anybody Who Disputes This Wants to Sell You Something You Don't Need
This has been verified by countless numbers of studies, beginning with the The Cowles Commission in the early 1930s. Alfred Cowles was disturbed by the stock market crash of 1929 -- which none of the stock pickers and advice givers of the time predicted.
So is the solution to avoid the financial markets?
Not at all. Just don't try to "beat" them, JOIN them. Put your money into income investments and cash -- or reinvest -- the money.
Author Resource:
You can invest successfully without being able to predict the future. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how income investments can help you retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. http://www.incomeinvesthome.com/.
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