Playing the market is a bad idea, especially now


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Today’s shopping spree ends with what these French always do – in tears. As we look forward to the inevitable collapse, let us review not only why day traders lost but also why so many people should not trade or invest in private stocks.

Daily business Basically, a low exchange rate means buying and selling investments quickly in the hope of making a profit. Brokers have reported an increase in trade and new accounts this year since the stock market crash in March, with investors rushing to negotiate. Epidemic locks keep people from their jobs and classrooms, and trade among young people continues to grow rapidly.

For this gold-plated poster, Robnesness is an investment-free investment app that uses behavioral nudity to encourage people to trade. Robinness added more than 3 million accounts this year, more than any other established and publicly traded broker in June. More than half of its customers are opening their first investment accounts, the company said.

People can start trading for less money, as Robinson offers fractional shares. In addition to stocks and mutual funds, the app allows trading in options, secret currencies and gold. Customers start with a profit, which allows them to lend business and maximize their profits and losses.

Alexander Kernes, 20, is one example of someone who made a mistake. A student at the University of Nebraska committed suicide after finding the remaining $ 730,165 in Robinson’s account. The beginner trader may have misunderstood the potential loss for one Options businessHe used the money he borrowed on the whole transaction as a loss. In fact, when he died, he had $ 16,000 in cash in his account.

Research shows that the vast majority of day-to-day traders lose money, and with a low-cost index fund, they get a better return of only 1% on a regular basis. The rising stock market, and the flood of inexperienced and good investors who have refused to discuss stock prices, have convinced traders for more than a few days that they are part of that 1%. They are really being selected by a few people who make money: they teach seminarians, e-books and strategies how to trade successfully.

Shares do not always increase

In general, stocks are a great way to get rich in the long run. If they can withstand the downturn, stocks have historically produced good results.

But those failures can be doomsday. During the Great Depression that began in December 2007, stocks lost half of their value. During the Great Depression, the market lost almost 90% of its value.

Prolonged downturn has caused business bubbles to rise in the past day, including during the dot-com boom. Nasdaq Integrated Stock Index grew by 400 percent in five years, all of these findings from March 2000 to October 2002.

Downward markets will eventually return. This is not true of individual stocks. Any single stock can lose value, sometimes up to zero, and never recover.

The most obvious way to prevent that danger is diversity. That means buying shares in more and more companies, including different industries and companies of different sizes. It is very expensive for most individual investors, which is why mutual funds and Money Improved in Marketing They are a better bet.

There is no such thing as free trade

Another way to increase wealth is to reduce investment costs. That means trade is less, not more, because trade costs even if there are no commissions.

For example, you have been benefiting from tax benefits for more than a year. If the transaction is not made in a tax-deductible account such as the IAAR, keep it for less than a year.

Another way to spend money is through what is known as bidding. Banks and financial institutions that facilitate trade in various stocks are called marketers. They offer to sell shares at a certain price (at the requested price) and buy at the lowest price (at the bid price). As a result, stockbrokers lose a small amount of money in each transaction. This is not a big deal for regular traders, but it will add costs to your portfolio and beyond.

Although the greatest potential value is that every business exposes your portfolio to the many ways in which we humans want to exploit our money. We hate losses and want to avoid regret, so we continue to lose shares. When we have to teach that we can predict the future or that we cannot do it this year, we think it reflects the present.

And we think we know better than we do about the so-called intellectual bias. If you are determined to trade or trade for a day, do not underestimate your losses, because you will surely play.

This article was written by Nerdwalt and first published by the Associated Press.

More from NerdWallet

Liz Weston is the author of Nordwall. Email: lweston@nerdwallet.com. Twitter: @lizweston.


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