≈ A genetic study of the prudent investor. ≈
Have you ever experienced that awkward situation on a family dinner or a meet up at your friend’s when someone throws this ball to you:
— “Did you know that the stock market is a place where you can lose all your money?”
There is only one possible answer to this question. Precisely this one:
— “It sure is.”
Whoever asked that is absolutely right. The stock market is THE place to lose your shirt. There is also Las Vegas or getting yourself involved with the Cosa Nostra but we are not covering these today.
Have you ever took some time to read Tackle’s disclaimer?
“All investing and trading in the securities market involve a high degree of risk. […]”
If we love the markets so much why don’t we hide this type of message? Because it is part of our job, not a thing that we should feel ashamed of. Traders and investors trade risk, uncertainty, and randomness. If these are fully suppressed so is trade and investing themselves. What’s the point, then? These are the actual things that will make us money in the long run.
The problem is that the person who asked you doesn’t know anything about it. They have the DNA of the prudent investor: Do Nothing Approach. They think that parking money in a mutual fund and sitting on their hands will help them build wealth.
So, while the stock market is rated ‘NC-17’ due to its explicit downside risk, the “safe and prudent” funds with their unnamable diversified holdings and obscene fees are rated ‘G’.
The promise of a full return with no apparent risk? We pass. That’s not part of the traders’ DNA.
Chart of the Day
No problem, Mr. President. We’ll keep on trading.
Video of the day
How To Estimate Reward to Risk Ratio
In this video, we will show you how to use a simple and easy to use tool that will automatically do the math for you & help you make better trading plans quickly.
Today’s line up
Traders Lounge 11 PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show 8:30 PM EST
This is our weekly MasterMind group. Join the coaches Grant Larsen and Gino Poore tonight, 8:30pm EST to discuss the markets and help you prepare for the week.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Financial freedom is a journey
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All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.