Wall Street ‘loves’ Stupid Investors!
Why Wall Street likes Stupid investors
There are 7 Deadly Investor traps that Wall Street needs you to believe, and act on. And as long as you don’t know the traps, Wall Street has clever ways to turn your irrational behavior against you, to manipulate you, to siphon off your money.
Wall Street doesn’t want smart investors. Wall Street makes its billions off investors who are clueless.
Wall Street, and Brokers, need you to believe in 2 Deadly activities:
1) That Stock-Picking works. Seriously, If you know what the best stocks are going to be, why would you tell others about it? If they really knew, they would buy up all the stock for their own accounts, and profit hugely. But they don’t know, and need your money to make a gamble with. Why risk your own money when you can use mainstreet investors money?
2) That Market-Timing works- Every day we’re pounded with predictions from so-called guru’s in the media, on tv, and on the internet. If you follow their advice, they can tell you when to get in and out of the market! That’s what they say. So what makes you think that a broker in Appleton, WI or a broker in New York has any clue on what the market is going to do over the next month, year, or decade? There is absolutely no evidence that anyone knows what the market will do, and even if they did know, why would they tell you? Again, they would use that information and trade for themselves and profit greatly.
So how does Wall Street keep investors Stupid?
Neuroeconomist, Richard Thaler of the University of Chicago, put it: Wall Street “needs investors who are irrational, woefully uninformed, endowed with strange preferences or, for some other reason, willing to hold overpriced assets.”
Bottom line: The last thing Wall Street wants is 95 million investors wise to Wall Street’s con games. Wall Street revenues would drop substantially if investors actually ‘got smart.’
Wall Street lives on investors irrational thought process-
Daniel Kahneman, a Princeton psychology professor and Nobel laureate, says Wall Street pros “are able to extract a considerable amount of wealth from amateurs.” And yet, “few stock pickers, if any, have the skill needed to beat the market consistently, year after year.“
The evidence from “more than 50 years of research” proves the stock-picking skills of fund managers is “more like rolling dice than like playing poker. They need you to believe that their fund managers are the most skilled and brightest and smartest people on Earth. However, At least two out of every three mutual funds underperform the overall market in any given year.“
Wall Street needs investors to continue to shovel their money over to active-management mutual funds and stockbrokers, thereby, keeping the illusion alive that they have the ability to be superior money managers.
Wall Street will always be several steps ahead of the Main Street investor. And unfortunately, nothing’s changed since Kahneman’s historic Nobel Prize. Wall Street’s gotten far more devious in running the same old con game at its old, broken-down casino. And America’s 95 million irrational investors are still walking right into the casino’s traps.
In fact, over the years Kahneman’s research has led him to conclude that all across Wall Street the “illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the industry.”
Wall Street’s army of financial mercenaries are working around the clock to manipulate you in seven deadly ways. They really don’t want savvy investors.
So don’t be fooled by those well-intentioned brokerage firms. Wall Street owns the casino. The house always wins. If you play and gamble your retirement savings, you will lose.
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