This Forbes article came across my news feed this weekend and I thought it was worth sharing: http://www.forbes.com/sites/jamesgruber/2013/07/27/the-royal-road-to-riches/.
In a nutshell, the author is telling us that for amateur investors, the stock market is nothing more than a gamble. The “institutional” or professional investors have all of the cards stacked in their favor.
Since late June, the pros have been on a selling spree. Meanwhile, the amateurs have been on a buying spree, driving the stock market to record highs. What does this tell us? The pros are cashing in and draining the amateurs of wealth by selling their assets at higher prices. When the amateurs stop buying, the market will fall and the pros will buy their assets back at a much lower price. Rinse and repeat.
See how it’s rigged against the little guy? This is why the banks are posting record profits while the middle class is barely making ends meet. The system is setup to transfer wealth from the majority to the financially savvy.
If you read the Forbes article to the end, you’ll see a very relevant point of wisdom. It’s important to note that the author is a stock broker and analyst so he understands the business from the inside out.
His advice for finding your “Royal Road to Riches?” Earn it by either working your way up through the ranks into executive management OR by starting your own business. Those are the only two ways to reliably achieve wealth. Investing in the stock market is a much more reliable way to give your wealth to the casino..errr…I mean, institutional investors.
The great part of our system (that still remains) is that anyone can become wealthy. We’re not a caste system, stuck in the level to which we were born. Everyone has the right and ability to grow beyond their roots. So get out there and improve your station in life! Learn something new! Take a risk and start your own business!