Question for all you stock investors out there?

Question

Does anybody actually believe that there is not a very large amount of very exclusive insider trading going on in the stock market?

Essentially making the whole thing kind of a Ponzi scam?
Buying after people all sell and then dump it again when it has as many " suckers" as possible and then buy it back again. All you have to do is have some rich insider friends to manipulate the media and time everything together.

Just wanted to take opinion polls on this and see what your reason for wanting to still trade there?

Is it just addictive , like the casinos in Vegas?
You still want to think that you will be with the lucky ones and the "losers" will be the misinformed others?

Answer 1

In any environment, knowledge is power. With effective research and monitoring, yes, money can be made in the stock market. Most people don't want to invest the time and effort into the research and upkeep, and those are the people who end up losing. Interestingly though, even "bad" stock picks frequently do better than parking money into a bank (inflation risk vs market risk). Again, it's all about knowledge.

PS Knowledgeable gamblers do much better than goofy Las Vegas tourists, too.

Answer 2

Well, there's several issues here. One is whether or not there is a lot of insider trading going on.

The answer is, "who knows". A better question would be, if there is a lot of insider trading going on, will that affect my investments? The answer is, if you're a long term invester who is well diversified, it will affect you almost not at all.

The difference between Vegas and the stock market is obvious and fundamental. The stock market produces more winners than losers, and in the long run (20+ years) almost 100% of well diversified long term stock holders make money. Over the long run, almost 100% of frequent casino players lose money.

Let's say, for instance, if back in 1980 you had $20,000, and decided to invest in the most simple stock fund, the S&P 500 index fund, and you never moved it, never read the news, and basically didn't do anything but leave it in there. At the time, it was around 114 (S&P 500 index). Today, it's around for $1,437. So, you would have around 12 times your original investment, and your $20,000 would be worth around $250,000.

(note there is no 30 year period, regardless of what dates you pick, that investing in the S&P 500 lost you money.)

Now, between 1980 and 2007, did a bunch of people profit from insider trading? Almost certainly. Did Enron explode? Did the nasdaq burst? Did the world trade center collapse? And this matters to you how (financially)?

So long as you're not day-trading, trying to out-guess other day traders and inside traders while racking up fees trying to guess tomorrow's news, it just doesn't make much difference.

Be diversified, invest for the long run, don't worry about about what's happening this week or this year in the news.

Remember, it's not about "timing the market", it's about "time in the market". If you're in the market for a long time, you'll win.

Answer 3

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Answer 4

The question lacks something in conciseness. Oh, I am sure the there is some stock manipulation. It might even be somewhat widespread. But the nack is to find good companies and invest for the long term. Don't worry about the daily, weekly or even monthly cycles. Of course, don't buy over priced stocks either. They are the ones most likely being manipulated. I never heard tell of anyone manipulating BAC, but then I might be a little naive.

Answer 5

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Answer 6

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Answer 7

i have got an umbrella fond since 3 years. it was never below 17% interest. so why take more risk than necessary?!

niels