Monopoly Money

Apparently, some younger, would-be investors (speculators) have become increasingly enamored with, what they believe, are the easy money opportunities offered by Robinhood and others.  Some are using money provided under various unemployment programs.  While they may believe that they are investing, day trading and a casino atmosphere are not investing.

It appears that many may have met with some success, probably, in part, because of the exceptional strength in the major stock averages since the depths of the early post-Covid-19 period. Their lack of experience may lead them to believe that their positive results are due to their strategies, rather than the rising tide of a bull market.  Experienced investors realize that almost everything does well in a bull market, while nearly nothing works in a bear market.  In other words, don’t confuse brains with a bull market.

The casino environment and a penchant for day trading are troubling.  Remember, one of the nicknames for Las Vegas is “lost wages”.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®