…and how you can profit from them

Most people don’t dare invest in stocks. They’ve fallen for the myth that only the big-shots can win and profit. By that they mean the banks, financial institutions, billionaires and other market makers. This myth rests on a rather tenuous assumption. It goes something like this;

The insiders have the game rigged in their favour. Investing is therefore a zero sum game you can’t win as they control when markets will rise or fall.

A majority of people who believe in this myth choose not to invest at all. These are the people who plow their hard earned money into $40k kitchen renovations.

The rest of their cash is parked collecting dust in the terrible investment that is the savings account, until a giant chunk of it is spent rebuilding a perfectly functional bathroom or Samsung releases a new ulta-flatscreen TV, twice as thin as their last model that hit the shelves only 3 months ago. Clearly it’s a buy!

Sounds familiar? Then this article is not for you. Your road to happiness shall remain paved with endless house renovations and the latest pots & pans from Martha Stewart living.

Instead, I’m writing for the minority who do indeed invest. Specifically the ones who do so through mutual funds run by the big institutions themselves. You currently subscribe to the if you can’t beat them, join them strategy, despite it being common knowledge that only a tiny minority of these mutual funds beat the market over time.

After factoring in their considerable front loading and hefty annual fees, an even smaller minority of them do. A simple index fund is a far better choice for retail investors. The Economist frequently writes about it. So does Marketwatch.


How the Rigging Comes to Life

I want to add a couple of observations whom, despite frequently touting the horn of the index fund strategy, the aforementioned publications never touch upon.


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