You know I’m no fan of Wall Street, but even I have to hand it to ’em: They have done a masterful job convincing regular folks that investing is difficult.
Those professional illusionists that perform from one end of the Las Vegas Strip to the other can’t hold a candle to this bunch.
They baffle folks with obscure jargon, they make people terrified of volatility, and even more insidiously, they manipulate investors into acting irrationally.
The Street spends billions on advertising intended to convince you that it’s hip to trade and invest, that you can do it from your car, that you can make great buys while you’re picking up your kids or doing your job. In fact, I’ll bet you’ve seen the same groovy commercials I have trying to convince you that’s the case.
What they don’t tell you is how they separate investors from their money…
Big Banks Have Everything to Gain from Double-Dealing
Wall Street, you see, has also spent billions trading against individual investors just like you. At the same time, they’ve ginned up unnerving headlines they know full well will scare you into doing something irrational – like selling when you should be buying or buying when you should be selling.
It’s an open secret that Wall Street’s power players bet directly against clients, including individual investors just like you and me.
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Goldman Sachs comes to mind: Goldman made tens of billions at the expense of its clients by betting against the subprime housing market… even as it sold mortgage-backed securities (MBSs) and related products they swore were as good as gold to willing buyers.
That’s no empty accusation.
According to documents prepared for the Senate Permanent Subcommittee on Investigations related to the subprime mortgage crisis more than a decade ago, Goldman had a net short position as large as $13.9 billion. Trouble is they were shorting the same MBS they were peddling to their investors.
Goldman denied the accusation vigorously… but then went on to pay a record $550 million to settle the charges.
“Where there’s smoke, there’s fire,” as the old saying goes.
All told, Wall Street has been fined a jaw-dropping $20 billion over the five-year period ending in September 2018.
But here’s the rub: The U.S. Securities & Exchange Commission (SEC) has collected just 55% of that total, according to The Wall Street Journal. In fact, fiscal 2018 was a lean year; only 28% of the $4 billion in fines levied were collected. That’s the lowest tally in 10 years, and sadly, it’s a number that’s unlikely to change for the better.
I mention this not to make you angry, though it certainly is galling. It’s meant to remind you to keep your eyes open – and to reserve judgement.
Just taking your emotions out of the equation could be the single most important financial decision you’ll ever make.
It’s Essential to Think About Who and What Is Behind the Headlines
The next time you see or hear about some dire “analyst report” from one of the biggest investment banks warning you that that “Big Tech is dead,” or the markets are “overdue for a correction,” stop for a moment and think.
It doesn’t matter what the report says; it doesn’t matter what kinds of investments you’ve got. None of it will matter a lick if you don’t question who stands to get rich from what’s just been said and why.
In other words, think about what emotions they’re trying to play to… and how they want you to feel.
Develop and keep that mindset, and you’ll never have to worry about getting suckered into a hasty money move that’s bad for you and your money. You’ll have an unbeatable edge because you will, ipso facto, understand their next move.
Successful investing always comes down to three things – not a single one of which is headline-driven:
- Lining up with the six Unstoppable Trends, each of which is backed by $1 trillion, minimum, that will get spent no matter what the headlines say, no matter how Wall Street tries to hijack the markets, and no matter what the Fed’s next move is.
- Focusing on the “must-have” companies instead of the “nice to haves” that Wall Street is peddling to the unsuspecting keeps you lined up with the world’s best CEOs instead of financial pirates.
- Maintaining diligent risk management at all times – not just when it’s convenient.
If you are not doing these things, you are leaving money on the table.
Worse, you may be caught flat-footed when the next big run higher starts. And mark my words: It will start when you least expect it.
Just ask anybody who sold out in a panic after the financial crisis in March 2009, after the S&P 500 lost a staggering 47.36% of its value… and never got back in. They would have missed a bull run as much as 353% higher.
They’ve missed turning $10,000 into roughly $20,210 with Alphabet Inc. (NASDAQ: GOOGL)… $306,880 with Amazon.com Inc. (NASDAQ: AMZN)… $59,190 with Raytheon Co. (NYSE: RTN)…. or even $82,690 with Boeing Co. (NYSE: BA), despite the fact that the company is under tremendous pressure right now.
The bottom line: Making the right moves is critical, and knowing who’s behind each headline (and why) is the key to doing that. History shows, very clearly, that turmoil inevitably produces huge profits for savvy investors who look beyond the headlines to uncover Wall Street’s real money moves.
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Regularly harnessing the V3 Effect can turn a small stake into $2.2 million in remarkably short order – in a year’s time. And get this: It’s easy to do. As you’ll see, you can make these “money grabs” yourself – again and again – in about five minutes a day. Take a look at how it works.
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