As I was saying, I've been studying the business world for a couple of years now. My intent was to educate myself before opening an online brokerage account and making my first million by investing in, well, whatever the pros said was bound to make me a million. Turns out there are a million experts with at least a thousand different methods for making money in the market, and hardly any of them say "buy really good stocks and hold them forever", which is what I was expecting most of them to say.
So, what have I learned?
1. The only people who make money in the market year-in and year-out are the brokers who get a small cut of every trade made on the exchanges. Doesn't matter if the market is up or down or bullish or bearish, brokers make money all day every day. Some days more than others, but it's all good.
2. Less than half of all professional money managers beat the returns of the S&P 500 each year. Simply buy an ETF or mutual fund that mirrors the S&P and you'll beat most pros most years.
3. There are legal ways to scam the market if you're big enough and rich enough. Big players in the markets, like sovereign banks, hedge funds, pension funds and large private banks have so much money that they can move the markets just by buying and selling huge blocks of stocks, virtually assuring a profit.
Elected government officials like your senators and congress critters have "inside knowledge" of legislation and regulatory actions that can predictably effect the markets. They take advantage of this legally. So now you know why every person who enters congress eventually leaves much richer than they were when they were first elected (besides just outright selling their influence).
High speed traders place their computer servers just blocks from the various exchanges and then connect to the exchanges servers with super-dooper high speed fiber optic cables. This allows them to see and react to market pricing a couple of millionths of a second faster than their competitors and minutes ahead of the general public (most of whom don't even have real-time quotes). The legality of this has been debated and the result seems to be "the devil take the hind most".
4. Most professional money managers do not have a fiduciary responsibility to their clients. So, unlike a doctor or attorney who is oath-bound to do their very best on your behalf, your money manager is not legally obligated to give you the best possible. financial advice. Many managers are paid on commission and they push the financial products that will pay them the most commission. Seriously. Legally.
5. Business journalism is mostly just cheer leading, especially on TV. The most prevalent phrase uttered on CNBC is "how do you play this market Fred", (or Bob, or Harry). If the markets are up it's a good day for America because the economy is "roaring along" and it's a good time to be in the market.. If the markets are down it's "is this the bottom Fred and are you buying the dip, getting yourself some bargains?" TV talking heads talk about the newest, hottest, most innovative "disrupter" businesses and their stocks. Apple, Tesla, Facebook, Twitter , Uber and Airbnb being the current favorites for discussion. It's like whatever celebrity is trending on social media. Replace Apple with the Kardashians, Tesla with George Clooney, Facebook with Jennifer Aniston and Twitter with Taylor Swift. It's a circus.
There's lots more, but you get the picture.
So what's the bottom line? How's my portfolio doing, you ask? I have no portfolio...but I do have guns, ammo, water, food, cash and precious metals for bartering.
Maybe I'll buy the dip after the next big market crash when the bond market collapses and leads the enitre world economy into a super depression and stock prices are down by at least 75% and everybody who was in the market is broke.
Then I'll be the playa'! Then I can do the Wall Street Boogie!