Profiting from Current Stock Market Turmoil

The true purpose of our financial markets is to make the rich richer and make the poor poorer. That has always been true and that will continue to be true as long as the free market system is alive and well.

You see, the purpose of the issue and sale of stocks and bonds, and various other financial instruments, is to easily exchange goods and services or provide those goods and services to the final consumer.

Corporations issue and sell shares of various classes of ownership in order to grow larger and increase the sales of their products. Yes, the financial markets are the places where those shares are bought and sold. Ergo, the investor goes to the market place and makes a purchase, in hope of an increase in value of what was purchased. Like It or not, most people invest in the financial markets for the sole purpose of making money from the appreciation of value of their investment.

It is also true that corporations can merge or buy a controlling interest of another corporation. Well, I believe that a corporation should sell the products that they produce in accordance with the Government Granted Charter to do that kind of business. The management of those huge corporations should be banned from buying out any other corporation. Then again, our politicians seem to comply with each and every request of Big Business, even if those favors granted violate anti-trust laws.

Worse yet, even the most knowledgeable investor can lose big money when the full weight of big money is against them. Those huge market moves, as a matter of fact, cannot even be predicted by technical analysis or fundamental analysis. They just happen. Prove me wrong.

Yes, that seems to be an excellent way to make fast money, but it also is a fast way to lose money. So, you better think very carefully about that opportunity before you risk and spend your retirement money, and then see it vanish into thin air. More often than not, most small investors become losers because it is the true weight of the big money that moves the markets. Well, if you happen to be on their side, you will also earn a good profit.

Then again, you could be a victim of big money’s desire to suck the wealth our of every other investor in the market place. You see, big money can be made by trading both sides of that market place. In other words, you can also sell high and buy low, thus earning the difference between the high and low price. That is called “selling short.” That is also the best and fastest way to make a whole lot of money within a very short time.

Like it or not, It is perfectly legal to sell short, regardless of who is hurt as a result. Keep in mind that even Bunker Hunt went bankrupt when his greed got the best of him.

The so call “Blue Chip” companies are the best investments for the long term investor. In the long term you will make money, and also enjoy the fact that your profit will be taxed at capital gains rates. Pick a good one and keep it for several years while you watch your investment grow. In that regard, the food industry is your best bet. You see, as long as there are people that will have to eat.