There are millions of small-scale investors out there who are struggling to get in on the next best thing. That are looking for the secret to making a lot of money in the stock market. The secret of the Wall Street insiders. In this article, we are going to reveal that secret. It is a secret that all women can use to become wealthy, and the secret is most likely not what you think.
It is true that wall street insiders, stock brokers, and other wealthy individuals occasionally might get access to and trade on information that is not publicly known. Trading on insider information is however illegal, and most professionals avoid using it.
They might also get some general tips that they are allowed to trade on. These tips sometimes bring them a nice profit, but they are not the secret to their success. It has a small overall effect on their net worth.
The idea that you need insider information that regular people do not have is an excuse used by investors who have failed to reach their goals. It is not true. All information you need to know to become a successful investor is freely available to everyone, and most of it can be found in books that are more than 100 years old. (As well as in newer books)
Exotic financial instruments
Some small-scale investors believe that the elite has access to leveraged financial instruments that allow them to make money in a way that small-scale investors cant. It is true that some markets and instruments are all but impossible for small-scale investors to invest in. This includes early investments in many upstarts. It is also true that some multimillionaires and billionaires have made a lot of money by being early investors in different upstarts. The truth is however that most wealthy people and financial insiders have very little to no money invested in this way. This is not the secret to the wealth of most investors.
The same is true for different leveraged instruments. Most industry insiders do not use them. These instruments are money makers for the brokers who offer them. Not for the people who invest in them. Insiders know this and stay away from these financial instruments.
The idea that you need access to financial instruments to which only the elite have access is a myth. The most important tools to become wealthy is available to everyone. Leveraged financial instruments can speed up the process but are more likely to cost you money then they are to make you money. It will take longer but the odds of becoming wealthy are a lot higher if you refrain from leveraged trades.
The true secrets
The true secrets used by the elite to become successful are not really a secret at all. They are willing to tell anyone who asks. But most people choose to believe that they lie. That they have other secrets they do not want to tell us. The reason people do not want to believe the true secrets of wealth creation is that it sounds too easy to be true.
The secrets to becoming wealthy are:
- Low fees: Wall Street insiders do not invest in any of the fancy products they offer. They know that very few wealth managers are able to beat the index over time. They know that it isn’t worth paying a high fee to an active wealth manager. He might beat the index one year but is unlikely to do so over 10 years. The smart money is invested in index funds with very low fees. The low fees allow you to earn more money over time and make this funds more profitable than active funds with a higher fee.
- Time: It takes time to become wealthy. Almost anyone can become wealthy if they are patient and allow it to take time. Low-risk strategies allow almost everyone the opportunity to be wealthy when they retire. These strategies are practically guaranteed to succeed. More aggressive techniques to make money on the market have a lot higher failure rate and is likely to see you fail.
- Buy when there is fear in the market: Most retail investors invest in the stock market during bull markets and withdraw from the market during crashes. This is not a good strategy. The smart money will move into the market during a crash and will try to withdraw from the market during the bull market before the next crash. Stocks will be undervalued under crises and allow you to buy below true value. Many stocks see high gains as soon as the panic starts to leave the market and saner heads prevail. Do not sell during a crash. Try to buy more stocks to lower your average purchase price during a crisis. This allows crises to become something beneficial in the long run.