Stop Donating Your Money to Wall Street

Everywhere you look, people are talking about this one stock going to the moon…

The news has a story about this one stock nearly every day…

On social media, you see that some idiot you went to high school with has made $23,000 in a week trading this one stock. Now he’s shipping all of his Facebook friends free chicken tenders as a joke.

(To make sure no one confuses this hypothetical with something that happened in real life, let’s give this one stock the name “StameGop.”)

No one will shut up about StameGop!

And you don’t really understand why some people are hyped about StameGop being such a great investment…

But money is great! And everyone seems to be making money by pushing a few buttons!

After all, StameGop has gone from $18 per share to $350 in a few weeks. 

Everyone else says it’s “going to the moon”… 

They seem to be saying it’s because of a “short squeeze”? 

Or because of “pre-owned sales declines normalizing around the mid, single digits, with potential upside catalysts from continued strength in digital”?

You’re not quite sure why the stock is going to go up. And it doesn’t matter…

A beast known as “Fomo” claws its way to the forefront of your conscious mind and hijacks the controls. 

(For the more literally minded among my readers, that’s the “Fear Of Missing Out.”) 

So you use a huge chunk of your retirement fund to buy shares of StameGop.

Another two weeks later, StameGop has dropped from $350 to $40 per share. Your losses are massive.

Basically, this is you:

And it sucks.

You get online to see what you should do and make your way to the internet message board that started the whole StameGop fad. 

Someone with the username “see_you_in_tea” says, “Only paperhands sell. Hodl, dummy.”

Another user named “if_you_see_kay” says, “Buy the f&$%!#* dip!”

It’s all quite vulgar and chaotic and you want no part in it. 

You sell, hoping to save some of your dollars.

And then, not one week later, StameGop launches back up to $265 per share.

You’re happy to be off the rollercoaster… 

But you’ve unwillingly donated your savings to Wall Street.

You’ve completely missed out on two wild, explosive run-ups. 

At one point, StameGop was a great investment with tremendous potential. For others it produced a mediocre gain. And for you? It was abysmal. 

And besides the lingering anger and dismay you feel… 

You’re wondering:

“Is there a Simple Investing Strategy I Can Use to Guarantee that I Never Lose Money Again in the Future?”

This isn’t going to be one of those essays that drags on and waits to the end to give you an answer… which in this case is “no.”

There are ways to massively improve your chances of success in investing…

But no, there is no guaranteed, surefire silver bullet in wealth building, investing, entrepreneurship, or life.

Everything in life involves risk — from taking an elevator to driving to the grocery store. 

Investing, at its heart, means risking a dollar today for the possibility that you’ll receive more dollars in the future.

But this is rarely the result due to the way most people invest.

That’s because most of our life decisions are calculated risks. 

The odds of you getting to the grocery store safely, which you’ve done a million times before, are pretty good. And the reward is simple and clear: you get to eat food this week. 

But then there are other, uncalculated risks. Like eating gas station sushi or frying bacon naked.

The reward doesn’t really match up with the risk. 

(Especially since there are simple, safe alternatives.)

I can tell you, after working in financial publishing for years, that when it comes to the stock market… 

The vast, vast majority of regular people are taking uncalculated risks. 

And we know this for a fact because the company Dalbar releases a $975 report every year called the “Quantitative Analysis of Investor Behavior.”

I’ll save you the trouble of buying it.

Inside, it says: “People suck at investing in stocks.” 

Over the last 30 years, regular investors fell short of the S&P 500’s returns by about 4.5% per year. Mostly due to trading and poor timing.

The fact of the matter is that most people in the markets are just speculating, and this is why they perform poorly. 

They’re throwing their money on the roulette table and hoping for the best. 

In fact, many professionals and “expert” advisors underperform the markets for the same reason. 

(I told you about one example of that from my personal life last week.)

Don’t get me wrong.

Sometimes speculating pays off. 

And there are a few methods people employ to tilt the odds in their favor, just as one might be able to learn card counting and rake in cash at the blackjack table.

Of course, when this happens, it’s only natural to see these speculative stock traders film themselves in a rented mansion…

They sit on a white leather couch with slicked back hair, eating sloppy steaks, and advertise their trading courses on TikTok and YouTube.

Such is the circle of life, I suppose. 

Good investing, though…

Good investing requires patience. And discipline. And self-control.

Good investing involves calculated risk. 

Making money in the market can be as easy and simple and risky and rewarding as going to the grocery store to buy taquitos. 

The key to doing that is understanding — truly understanding — something Peter Lynch once said: 

“These are not lotto tickets. Behind every stock ticker is a real company.”

Remember that the next time you’re tempted to buy a stock like StameGop.

If behind a stock is a real company, that means there’s stuff you can learn about it…

The money it makes, the prospects of its business, even something as simple as what the business’ headquarters looks like. 

Once you know all of that, you can very quickly determine how much you’re willing to pay for a fraction of that business.

I’ll show you some simple tricks for doing all that in the future… 

But if you don’t want to do all that work and research? 

Either get advice from someone you can trust…

Or make a calculated risk in a simple passive index fund with low fees, and let it sit there and grow while you sleep.

Next week, I’ll give you some ideas for that, and I’ll also go into when might be the best time to get started investing if you haven’t yet.