It seems that stock market trading is quite different from when I was dabbling in it in the past. In those days I studied several different parameter including the P/E ratios and such before deciding which company to invest in. And when I did buy a stock I held it for at least a couple of years. Now days trading in the stock market seems more like gambling at the roulette table than anything else.
The only way you seem to be able to make any money is to try to time when you sell back your stock. Now a long-term hold is defined in months if not weeks instead of years as they used to be. The three major indexes gyrate wildly based on whether a dictator coughs or what particular word the federal bank guys choose to use in his latest speech.
As an experiment I put $4,000 into an Roth IRA for my wife in 1998. It is invested in a moderate stock fund of a very well known mutual fund company. As of today that $4,000 is now worth $4,400 so that makes in a total 1% return over an eleven year period. It has gone up quite a bit higher and lower over this period but the overall effect is one percent. Since I have a rather sizable 401k (at least by my standards) sitting in a major mutual fund company I get frequent telephone calls from “investment experts” wanting to help me grow my money; of course they want a percentage of the total value for doing this. I can just imagine what is going on in the background when they call and I bet it is not much different from the cartoon above ;)
I admit that the 401k is rather conservatively invested but it has done quite a bit better than my wife’s IRA over the years. Should I give some thirty year old Wall Street jock control over my life savings? I don’t think so. I am not interested in leaving untold wealth for kids/grandkids even if I had them. Unearned income just seems to contaminate people rather than help them.
I am just not a gambler in the casinos or in the stock market….