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Are You Voting for or Trading in Stock?

27 March 2008 - Features - Editor

What role does advice play in your stock trades? Are you the altruistic type who shares priceless insights for free? Do you lack confidence in all stock market sources? Which is the best way to structure a stock trading team?

We have visited ETF and Investment Club matters before. These are the two ends of the advice spectrum in stock investment. Your cash is in the hands of another when you buy in to an ETF. You have a vote on every stock move in an Investment Club.

Most of us are suspicious of extremes. It makes sense to mix and match advice and your hunches. Most investment portfolios are blends of all kinds of risk and return trade-offs. How much investment advice you take depends on your background. The capabilities and integrity of stock advisors determine whether you stay with or run away from future advice.

Only one universal truism applies in the business of stock investment advice. You buy stock because you believe it represents inherent value in excess of your purchase price. The person who sells it to you probably believes that the sale price of the stock exceeds the inherent value. Both people cannot be right. Stock trades around differing perceptions. The latter is dependent on different sets of information. It makes good trading sense to keep sound stock information secret. Most people will not vote publicly for the stocks they buy or hold.

What do you think? Join our forum and let us know.

 


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