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5 Investing Myths Debunked

Tyler Durden's picture




 

Submitted by Lance Roberts via STA Wealth Management,

 

 

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Tue, 06/02/2015 - 14:55 | 6156301 CarpetShag
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1. Blah, Blah, Blah
2. Chart porn
3. Go to 1.
So why don't you show us your portfolio, Lance .

Tue, 06/02/2015 - 15:10 | 6156359 nuubee
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I've come to the conclusion that most investors understand what they're doing so poorly that the reason they don't show their portfolio's has nothing to do with privacy concerns... it's because they don't want to be embarassed at people seeing the shit they own.

Tue, 06/02/2015 - 15:22 | 6156407 NoDebt
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Say you start with $1000.  End of year one, a bad year, it's now worth only $500.  Next year, a good year, value goes back up to $1000.

What's your rate of return (according to most sell-side sales literature)?

Hint:  It's not zero.  It's a substantially high positive number.

Tue, 06/02/2015 - 15:43 | 6156489 Bastiat
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Year one return:  -50%

Year two return:   +100%

-.5 + 1 = .5;   .5/2 = .25

 

Average return:  + 25%;  Cumulative return:  0%

 

 

Tue, 06/02/2015 - 14:57 | 6156309 Bemused Observer
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Myth #6) The notion that what you're doing in these markets is investment, and not GAMBLING.

Tue, 06/02/2015 - 15:01 | 6156320 Skateboarder
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+infinity. If you can't touch it and defend it, it don't exist. Storing money in bank in digital form is gambling too...

Tue, 06/02/2015 - 15:30 | 6156447 raywolf
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professional gamblers make lots of money... amateurs always lose....

Tue, 06/02/2015 - 14:59 | 6156316 chomu
chomu's picture

But, Lance....how is this gonna help the wirehouse guys to keep selling their shitty funds?? The sheeple that they suck dry need not know this Lance..

Tue, 06/02/2015 - 15:03 | 6156321 JustObserving
JustObserving's picture

The biggest investing myth is that markets are free and fair.  Had it not been for Fed intervention by printing trillions and intervening in markets to support them, US markets would be 70% lower.

US markets are held up by the fraud and corruption of the Fed. Companies borrow at virtually no cost to buy back their own stock leading to a bubble which cannot but not burst.

ZIRP and NIRP is about 15 Western economies while debt levels are sky-high and can never be repaid is a clear indication of the fraud that sustains the free and fair markets of the West.

What’s Pumping The Stock Bubble——$4.2 Trillion In Corporate Bond Issuance In Last 3 Years

http://davidstockmanscontracorner.com/whats-pumping-the-stock-bubble-4-2...

Tue, 06/02/2015 - 15:13 | 6156341 Palladin
Palladin's picture

 

 

Here's some more meaningless BS from Wall Street:

http://www.businessinsider.com/meaningless-market-phrases-that-sound-sma...

The one I like the best, is when the market sells off on Friday, and the MSM pundits will say something like..."The market sold off today because nobody wanted to go home long over the weekend" Well this is BS. Because if you think about it, whoever didn't want to hold stocks over the weekend had to sell it to somebody, who obviously didn't mind holding the stocks over the weekend.

It might be news to the talking heads on CNBC, but All stocks have to be owned by someone, all the time. There are no exceptions.

Tue, 06/02/2015 - 15:12 | 6156373 kaiserhoff
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7) Don't own stocks during September and October.

Not much logic to it, but historicly holds true.

Tue, 06/02/2015 - 15:20 | 6156413 Turdy Brown
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this clown forgot the most important point why all so called investment "advisors" are wrongo:

 

THE MARKET IS RIGGED! 

 

You are better off going to Vegas!

Tue, 06/02/2015 - 15:22 | 6156416 foghorn leghorn
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6) The market is based on the fundamentals of supply and demand

If you invest in a company that makes good money is growing and expanding. Then your investment will grow with the economy. Especially if the company pays a good dividend and the fundamentals are good. ETF's and mutual funds help you to reduce risk especially those run by professionals.

I can easily give you a couple of companies who's fundamentals are actually far better than most companies in the S&P 500 but are still invisible or heavily shorted in the market.

7) Efficient market hypothesis

Same as above I can give you entire industries that should absoultely be making money yet are heavily shorted by banksters in the futures market.  Even when there is a severe shortage (copper) where the only way that other industries can get supplies is by actually buying it in the black market. Case in point.

Copper theft leaves thousands of subway riders stranded

 

 

Tue, 06/02/2015 - 15:37 | 6156473 hibou-Owl
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this article is crap!
how many companies have survivEd 140 years.

The biggest problem for investers is avoiding the bankrupties.
THE INDICIES Are live, shit is ejected and new companies added.

outpreforming the indexes is tuff, which needs smart analysis.

Tue, 06/02/2015 - 16:42 | 6156820 adr
adr's picture

The time I could have begun investing in the market with my own money was 1999. 

I don't think investing at that time would have been a wise buy and hold strategy.

Tue, 06/02/2015 - 16:44 | 6156835 TweedleDeeDooDah
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When I come across a "buy and hold" type, I suddenly revert to being "Corky's dad", and tell them to "be strong" and "stay true to what you believe in", before I turn away and shed a sad tear for their handicap and lack of an ability to understand it.

Tue, 06/02/2015 - 21:37 | 6157784 Piger Argentarius
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Unless there is a better option available, the actual rate of return isn't really that important. Despite the information presented here, which I do not dispute, the stock market still remains a better alternative than just about anything else accessible to the average investor.  Now, if you have the technical proficiency to do really well as a day trader or a real estate investor or you want to invest five or ten years of your life and mortgage your future to build a successful business then perhaps you can do better.  But, very few people have the skill or the drive to pursue these options.

Whether the return is 10% or 6%, if you save as much as you possibly can, and invest it in low cost diversified funds, you'll be doing better than if you spent the money on cable tv or a nice expensive car with satellite radio in it.  Even if the whole of corporate america is morally benkrupt and incapable of getting anything right they still have the money to buy the political outcome that will let them survive and get rich anyway.  If we learned anything from the 2008 financial crisis this is the lesson, an investment in corporate America will pay off in the long run because they can buy everyone's money (direct from the treasury) at a very favorable rate (near zero) and then invest it in just about any stupid thing.  That's a busines model!

Wed, 06/03/2015 - 06:48 | 6158400 cozgenc
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You cannot beat the market, but you recommend technical analysis? You don't know what you are talking about. You cannot beat the market implies buy and hold and don't try anything else. Who are these people posting these articles?

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