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Greed Hits the Mailbox
Nearly every investor receives them in the mail: slick and usually colorful PR pieces, disguised as investment research, which are really nothing more than promoters out to convince you to buy their stock “on the ground floor.”
Many promotions...
How to save money by spending wisely
Why is it that the older and richer people become, the more conservative they are with their money? Have you ever done or know someone who has made an investment that promised a 10% interest or profit per month? Everyone wants to make above average...
Investigate Your Investments
Are you not opening your investment statements that come every month? This article provides quick tips and guidelines to understanding your investment statements.
Have you ever said: "I don't even open my brokerage statements" or "I let them...
New Year's Resolutions For Stock Market Investors
It is at this time each year when we make New Year's
resolutions, to help reduce the gap between where we are today
and where we want to be in the future. Having been able to speak
to thousands of investors over the last five years, I...
Why Your Mutual Fund Doesn't Return as Much as You Think
(ARA) - As tax time nears, many mutual fund investors are starting to wince. While most mutual funds' returns were down last year, their tax bill remains high.
After years under-performing the S&P 500, the average US stock mutual ...
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How Do You Rank in The Investing Hierarchy?
Copyright 2006 CashFlow Avenue
You probably have heard this saying before - "It is lonely at
the top." If you find yourself in this position, then you are
probably at the top of your own niche. Our society is made of
hierarchies. Most countries are headed by Presidents, and Prime
Ministers. It is them who make decisions that would affect the
nation's fate and success. Corporations follow the lead of their
Chairmans and Chief Executive Officers. Below these leaders you
would have the Vice Presidents, Deputies Vice Presidents, Senior
Managers, etc. A hierarchy essentially looks like a pyramid.
Whoever sits at the top of the pyramid normally makes the most
money as well as has the most influence in that "society." This
pyramid can also be applied to nature where they call this a
food chain. Predators are normally at the top of the food chain
while small defenseless herbivores are at the bottom of the food
chain. The higher you are in the pyramid the fewer predators,
(that may have you for lunch) are out there.
The same can be said in the Investing World. How do you, as a
retail investor, rank in this food chain? Let's try to
understand how the Investing Hierarchy looks like.
Stock prices are normally moved by information (good or bad).
Whoever can access and react fastest to these information would
be placed right at the top of the Investing Food Chain.
Capitalist and Entrepreneurs who manage to get their companies
public listed would be the first to know of critical information
that would affect their stock prices. One level below these
individuals is high worth individuals who would provide initial
capital to ambitious Entrepreneurs. Venture Capitalists, who
provide significant funding to take the corporation to higher
levels, are next on the hierarchy. One step below the venture
capitalists is the Investment Bankers who provide
Associated Websites
financing,
underwriting, and distribution to take a corporation public.
These individuals are the top predators in the world on
investing. They would have access to information that is not yet
made known to the investing public.
Do retail investors rank below these groups of people?
Definitely NOT!
Above the retail investors, we would have Financial
Professionals (Mutual Funds, Hedge Funds, etc) who would analyze
stocks for their clients. Brokers and Floor Traders are also
ranked higher than retail investors in the Investing Food Chain.
And finally, the retail investors are right at the bottom of the
food chain. No wonder more than 90% of retail investors end up
losing money. Ask yourself, how many times have you bought
stocks due to good news in the news or newspaper only to see it
go down as soon as you enter into position? Most of us have been
there before. By the time, this information reaches the public;
it is normally too late to buy. The big guns are already in
position weeks ahead and would be ready to take profit when
stock prices starts to move up dramatically.
Fortunately, through stock charting, retail investors have a
chance to interpret and to understand what the big guns are
doing in the stock. Heaving buying and selling by the elite
group leaves footprint and trails on the stock market. It is up
to us, as retail investors, to understand what the stock charts
are trying to tell us. Understanding charts can move us up in
the Investing Hierarchy.
However, a word of caution, technical analysis is an art and can
be very subjective. It should only be used as a roadmap or
guideline to enter and exit a position.
About the author:
CASHFLOW AVENUE is established to provide Low-Risk Options
Trading Recommendations to the common traders in their pursuit
of financial freedom and a better lifestyle.
http://www.cashflowavenue.com
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