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A Stock Investing Gadfly on a Dinosaur's Butt
Have you ever noticed how some words in the English language are so perfectly named for what they describe? And how some words seem to be, I guess you could say, backwards? For instance, the word sunflower! How wonderfully aptly named is the...
How Do I Define My Market?
Your market is who you want to reach. Your customer. Who is your average customer? What is your estimate of total market size? What territory do you intend to serve? Will you offer a variety of products or services?
The more specific you...
How Do I Implement The Lease Purchase Plan?
Well, as we have discussed in previous newsletters first you have to set up goals for yourself, both long term and short term. Don’t forget these goals define how your business is run. They will determine what you do on a daily, weekly and...
Is Tax Lien Investing Still Profitable?
Tax Lien Investing is not the secret of the wealthy anymore. Do
to late night infomercials and high priced investment seminars
that tout buying tax lien certificates as a high yielding
investment, more and more people are buying tax liens. As...
Real Estate Investing By The Numbers
Real Estate Investing By The Numbers Just like most things real estate investing can be broken down into easy to learn step. Step One - Learn the basics: Ownership of real estate is evidenced by a valid deed. When you buy property the seller...
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How Do You Rank in The Investing Hierarchy?
Copyright 2006 CashFlow Avenue
You probably have heard this saying before - "It is lonely at
the top." If you find yourself in this position, then you are
probably at the top of your own niche. Our society is made of
hierarchies. Most countries are headed by Presidents, and Prime
Ministers. It is them who make decisions that would affect the
nation's fate and success. Corporations follow the lead of their
Chairmans and Chief Executive Officers. Below these leaders you
would have the Vice Presidents, Deputies Vice Presidents, Senior
Managers, etc. A hierarchy essentially looks like a pyramid.
Whoever sits at the top of the pyramid normally makes the most
money as well as has the most influence in that "society." This
pyramid can also be applied to nature where they call this a
food chain. Predators are normally at the top of the food chain
while small defenseless herbivores are at the bottom of the food
chain. The higher you are in the pyramid the fewer predators,
(that may have you for lunch) are out there.
The same can be said in the Investing World. How do you, as a
retail investor, rank in this food chain? Let's try to
understand how the Investing Hierarchy looks like.
Stock prices are normally moved by information (good or bad).
Whoever can access and react fastest to these information would
be placed right at the top of the Investing Food Chain.
Capitalist and Entrepreneurs who manage to get their companies
public listed would be the first to know of critical information
that would affect their stock prices. One level below these
individuals is high worth individuals who would provide initial
capital to ambitious Entrepreneurs. Venture Capitalists, who
provide significant funding to take the corporation to higher
levels, are next on the hierarchy. One step below the venture
capitalists is the Investment Bankers who provide
Associated Websites
financing,
underwriting, and distribution to take a corporation public.
These individuals are the top predators in the world on
investing. They would have access to information that is not yet
made known to the investing public.
Do retail investors rank below these groups of people?
Definitely NOT!
Above the retail investors, we would have Financial
Professionals (Mutual Funds, Hedge Funds, etc) who would analyze
stocks for their clients. Brokers and Floor Traders are also
ranked higher than retail investors in the Investing Food Chain.
And finally, the retail investors are right at the bottom of the
food chain. No wonder more than 90% of retail investors end up
losing money. Ask yourself, how many times have you bought
stocks due to good news in the news or newspaper only to see it
go down as soon as you enter into position? Most of us have been
there before. By the time, this information reaches the public;
it is normally too late to buy. The big guns are already in
position weeks ahead and would be ready to take profit when
stock prices starts to move up dramatically.
Fortunately, through stock charting, retail investors have a
chance to interpret and to understand what the big guns are
doing in the stock. Heaving buying and selling by the elite
group leaves footprint and trails on the stock market. It is up
to us, as retail investors, to understand what the stock charts
are trying to tell us. Understanding charts can move us up in
the Investing Hierarchy.
However, a word of caution, technical analysis is an art and can
be very subjective. It should only be used as a roadmap or
guideline to enter and exit a position.
About the author:
CASHFLOW AVENUE is established to provide Low-Risk Options
Trading Recommendations to the common traders in their pursuit
of financial freedom and a better lifestyle.
http://www.cashflowavenue.com
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