I feel that one strange thing about the stock market is that it is most attractive to those people who are most likely to lose money on it. I first invested (rather speculated) Â just before the dot com burst, and the only reason I was attracted to the market was fast money.
Guess what? The people who are attracted to fast money are the most likely to buy penny stocks, momentum stocks, “sure-shot” stocks, day trading stocks and generally anything that has a good chance of going to zero.
I think I must have invested in all these type of stocks at the time, and I can’t remember if anything ever went to zero, but it certainly came close to it.
I was reminded of that time because of this email I received last week.
I have been following your blog since long and have learnt a lot of things. Now i thought i should ask you something to help me financially.
Looking forward to your reply.
To invest in intra day is a lot of work and i dont know much about investing. Now are there institutions out there where i can invest my money in or any share broker who i can trust with my money and he in turn reinvest it in intra day trades… Or any service that provides intra day tips???
I understand this a question from a noob but then again.. Please do reply.
I made a brief reply cautioning the reader against doing this because these type of things just don’t work, and you can meet hundreds of people who have lost money this way.
If you don’t know anything about the markets then it is better to invest in a well known mutual fund regularly rather than taking your money and giving it to someone who promises to double it in a year doing intra day trading.
If they could really make money like that they would be doing that with their own money, and not seeking capital from others.
People who sell intra-day tips are even more inexplicable; if their tips are so good, why aren’t they acting on them instead of giving them out for a fee?
Short term predictions hardly ever work. Before putting your own money, you can very easily create a fake portfolio and follow the advice of “pundits” who predict market movements and see where it leads you. Do this for three months and see the results before putting your real money in day trading.
Most pundits advise you to buy when the stock market is up and sell when it is down, which is the exact opposite of what you should be doing.
I don’t know of an easy way of doing this but it will be fun and enlightening to see what traders and pundits were Tweeting out about this time last year, when the market was really bad, and in hindsight, also presented a good opportunity to buy. I think you will find that none of them were too enthusiastic about stocks at the time.
If you want to trade, at the very minimum, you should be willing to spend the time needed to understand what trading strategy is being followed and ensure that you aren’t being taken for a ride by people who are just punching buy and sell orders on a whim.
This is difficult but at least it will give you the comfort of knowing what’s happening with your money. There are trader conferences that you can attend and while you will never find that information on OneMint, there are other blogs and websites that you can read to get that information. If you are attracted towards trading then you must spend the time before spending the money.