Wall Street are brokers. They are commission agents.
They make money when you change positions in your account. They desire you to change direction of your account, they care not of the direction of the security.
Wall Street sell investing themes that encourage you to change you account, remember these:
- Technology is the new thing
- Bonds is the new thing
- Foreign assets is the new thing
- Emerging markets is the new thing
- China is the new thing
- Commodities is the new thing
Currently the herd is in: Short VIX, Long SP500, Short Bonds
Yes, they may be correct, but it is the frequency of the change which suits your Wall Street broker.
Consider this very accurate analogy.
The investing public are the sheep, the broker is sheep dog, the farmer is the back room strategist, and the paddock gate is the point of commission. Moving from one paddock to another is the change from one investing theme to another, and if the sheep do not move fast enough the sheep dog scares them enough to move. Yes this is Wall Street in its purest form!
The trick for the savvy investor is to pick (or be first, or contrarian investing ) the new paddock before Wall street herd the public into it, this allows you to enjoy the price rise from new buying. Of course Wall street knows which paddock to target. They never lose!
This is why you must never fall in love with your positions, all trends end, new ones are born, and do not be last in to the new trend.
From the movie Margin Call. All trends see the music stop.
This why Richard Wyckoff logic is the ideal education for the investor. Understanding accumulations and distributions within the 'investing themes' allows you to see where the informed money is moving to new positions or leaving old ones.
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