Why There Are No Customers Yachts
Everyone knows the old joke about the
brokers having yachts, but the customers don’t.
There is more truth than fiction here. Why don’t
the customers have yachts too? There must be
something wrong.
The reason you gave your money to some
brokerage company was to have it grow and make
income for you - but it hasn’t. Why? No, they
are not stealing at least overtly. Your broker
is doing the job he was taught to do - have
you open an account and help (?) you buy a
stock or fund.
When a person becomes a broker he must
pass certain tests given by regulatory agencies.
Once passed his brokerage company gives him two
manuals. The first is a list of the
regulations. Never break those rules or he is
fired. The second manual is how to open
accounts and get customers to “invest”. There
is no third manual (the most important) on how
to make money for customers and how to protect
customers money from loss.
The broker might think he knows how to invest
(he doesn’t), but he definitely is never taught
how to protect peoples portfolios when their
stock heads down. If the investor is ever going
to have his yacht he must learn the latter.
Brokers are taught the ten basic rules for
customers. They are the Ten Commandments. They
should be called the Ten Lies of Wall Street.
In a nut shell they are 1. Do Research, 2. Buy
and Hold, 3. Dollar Cost Average, 4. Diversify,
5. Buy A Good Stock and Put It Away, 6. You
Can’t Afford To Be Out Of The Market, 7. Never
Try To Time The Market, 8. Rearrange Your
Portfolio With Age, 9. Your Broker Will Watch
Your Account and 10. The Market Always Comes
Back.
Brokers and financial planners espouse
these platitudes as fact and they do it without
thinking. Each one can be proven to be wrong
and only lead to loss of capital.
Brokerage companies are there to make money.
They don’t do it by investing their money, they
do it by investing your money. They are service
companies not investment companies. Each time a
trade is made whether it is a profit or loss
they make money by providing that service.
Brokers are salesmen and it is their job to
generate income for the company or they will be
fired. The company could care less whether you
make or lose. Just send more money and trade.
If you want that yacht you must learn not
to follow those Ten Commandments.
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. Copyright 2006 All rights reserved.