Brain Snappers and Other Wall Street Nonsense

The last time you spoke with your broker did he use any of the following words? Diversification, Price-to-earnings ratios, discretionary trading, lifting a leg (he's talking to you not your dog), leverage, divergence, fee-based compensation, escalator clause, tactical asset allocation and other mesmerizing words to place you in stupefying shock.

Brokers do that to let you know that you don't know anything about the market and you must allow them to make decisions for you. You don't know the language. You are just too dumb. Another mushroom.

Wadda ya' mean mushroom? Didn't you know? Most customers are considered mushrooms. A mushroom is grown in the dark and fed horse manure. Now you understand why they treat you that way.

Then try to get him to explain commission structures of mutual funds. Oh, you're not allowed to ask that. You might want to read page 35 in the January 31, 2005 issue of Newsweek magazine for an excellent breakdown of this Wall Street scam. Maybe you better not. You will get mad at your broker.

Another one of those big words they don't want to discuss is redemption fees. This is an extra charge of as much as 2% of the amount that is deducted from your check if you sell within a certain period of time. Brokerage companies tell you it is to discourage frequent short-term trading which adds to their cost of doing business and increases the expenses that are charged to you every year. Having owned a brokerage company I can tell you this is more of that brown stuff they feed to the mushrooms.

The reason for redemption fees is to discourage you from selling. You might take money out of your account and that must be restricted in every way possible.

Some of the biggest words are associated with those special limited partnerships. These are definitely brain twisters. You can get these in real estate, hospital construction, oil and gas pipe lines and the most confusing one of all is technology. And they are all guaranteed. That word I understand, but be sure you read the fine print to see what is guaranteed. You remember the old one that they give it to you in the big print and take it away in the fine print.

How about placing a limit bid on a secondary distribution of a special claim on residual equity certificates? You didn't understand that? Believe me you don't want to.

When you are solicited by your broker, financial planner or anyone to buy any equity you must clearly understand what you are buying.

If you don't understand it don't buy it.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

---

The Three Legged Stool

My paternal grandparents were born near Lake Como, Italy. My grandfather learned how to farm, and he did just that until he died chopping wood at age 88. As a boy, I would... Read More

Chinas Great Missed Opportunity

While a U.S. Representative to the Asian Development Bank Executive Board of Directors during the first Bush Administration, I consistently called for China to "bite the bullet" and privatize its state-owned companies as... Read More

Investing In Sons Business Could Cause A Real Family Feud

Q: My youngest son wants to borrow $5,000 to start his own business. My wife is afraid to tell him no. She thinks we should just give him the money and not expect... Read More

Coca-Cola - A Value Stock?

There has been much talk lately about Coca-Cola and its potential as a value stock ? as it now spots a dividend yield of 2.6% (which is the highest dividend yield since the... Read More

Porters Five Forces Analysis

If you've ever listened to Warren Buffett talk about investing, you've heard him mention the idea of a company's moat. The moat is a simple way of describing a company's competitive advantages. Company's... Read More

Direcway & Wildblue Set to Square Off this Fall?

There is a cat fight brewing between Direcway LLC, Starband and Wildblue Communications for the large number of people in the U.S. who can't get some type of broadband internet and are willing... Read More

It Must Be Joe Cockers Market

Agonizing displays of poor theatrics failed to entertain my mind one recent Saturday evening. I scrolled across several television channels hoping for an engaging program. Finally, one particular concert intrigued my senses. There... Read More

Brain Snappers and Other Wall Street Nonsense

The last time you spoke with your broker did he use any of the following words? Diversification, Price-to-earnings ratios, discretionary trading, lifting a leg (he's talking to you not your dog), leverage, divergence,... Read More

Annuity Help

Many people today are looking for annuity help. The biggest challenge seems to be that most of the help is biased. What exactly do I mean? I mean that there is always a... Read More

Who Wants To Be A Millionaire?

I am sure you have probably read about the power of compound interest. And how if you invested $10,000 at 10% return and let it compound for 50 years you would have a... Read More

Super Rules, OK?

Do you rule your superannuation or does it rule you?It's easy to fall for some myths about your super unless you do some clear thinking about who is in charge. Virtually all Australian... Read More

DXPortfolio: A Great Passive Investment of 25% to $40% per month

First, I need to explain about e-currencies or digital currencies. DXPortfolio are based and supported by the supply and demand of e-currency. Before, I go on to explain how I have used my... Read More

Investing 101: Risk Terminology - BETA

About thirty years ago, statisticians armed with all of their statistical theories began to confront the financial markets. A handful of useful tools emerged that the average investor should be familiar with when... Read More

Dont Catch a Falling Knife

One of the most common mistakes made by inexperienced investors is trying to "catch a falling knife". This is the phrase used to describe the habit of buying stocks that are in "freefall",... Read More

Is Your Mutual Fund the Right One for You?

Mutual Funds are considered to be one of the best investments one can get hands on. They're very flexible and cost-effective. An excellent investment for people with restricted knowledge, time or, money.For beginners,... Read More

Learn How to Lose and Risk Management

One of the leading traders on Chicago Mercantile Exchange, because of a single trade lost everything!For all of his years of experience and money, he had failed to master the most important concept... Read More

IF - The Wonders of Investing

If it seems as if all investors are selling, who is buying?... Read More

Investing & Online Stock & Share Trading: Money & Risk Management - Atkinson Portfolio Planner (1)

This article was originally featured in Daryl Guppy's 'Tutorials in Applied Technical Analysis', voted no 1 trading newsletter in Australia by Shares magazine & no 4 in the world by US Stocks &... Read More

Beginning Investor - Investment Terms

Over the course of the past two months, readers have brought to my attention that there is a steep learning curve for investment terminology. That's why the focus of this month's Beginning Investor... Read More

Find Your Investing Soulmate on the Jersey Turnpike

As a followup to a previous column, "Irreconcilable Differences," I received an e-mail from a reader asking how she could ensure, ahead of time, investment compatibility with a future spouse.Unfortunately, like most issues... Read More

Maniac Investment

Let's first understand what maniac means. According to Webster a maniac is "mad; raging with madness; raging with disordered intellect". You don't know anyone like that, do you?There is a book that is... Read More

Day Trading Strategy or Stock Trading Software? The Way You Pick Stocks Affects Your Results

The trading method you employ to approach the stock market can make a big difference in your results.Stock trading is a very competitive field and in order to succeed you need to FOCUS... Read More

Quit and Retire Three Years Earlier!

For most people, there is a direct correlation between how worried they are about retirement income, and how much they can actually do about it. This is because the more worried you are,... Read More

Margin Benefits are Marginal at Best

Margin is one of those things that novices find puzzling about the stock market, but the concept is really quite simple. Still, with understanding the basics of using margin accounts, determining the wisdom... Read More

Diversify!

The best way to avoid being hit hard by a stock market crash or another Enron/Worldcom fiasco is to make sure you don't put all your eggs in one basket. Diversification helps ensure... Read More

How to Invest Overseas - Intelligently!

In recent months, many advisors have talked a lot about the wisdom of investing overseas, but most have failed to really address the way to do that. For new investors, investing in the... Read More

Day Trading the SP Futures with Initial S/R and the NYSE TICK

For instance, if the market moves up in the first 20 minutes of trading, touches the initial resistance zone, and then turns down, this implies that a good tradable downtrend move is likely... Read More

The Switzerland of Asia Shines

In many respects, Singapore is the Switzerland of Asia.Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father,... Read More

Why Should I Use Penny Shares to Build Wealth?

A strategic question. Why indeed?1. A penny share would usually refer to a share available for less than $1.00. This makes the aquisition of shares manageable by even the most modest investment budget.2.... Read More