How to lose money in the stock market

Being a bear

Before you can lose money in the stock market, you have to choose a stock to buy. Review the stock quotes in the newspaper and choose one that’s gaining fast in value. Don’t bother with knowing why it’s going up, just buy it, and don’t consider that stocks that go up rapidly will soon turn around and go down.

Take investment advice from your friends — if someone you know complains that every stock he buys goes down, he’s the one to listen to.

On the sell side, avoid holding on to a stock that’s going down — dump it fast. Unless there’s a specific reason it’s losing value, like a big lawsuit or a bankruptcy, disregard the fact that stocks that go down generally turn around again and start going back up. Ask your broker about a “stop loss” order — an order to automatically sell it all when the price goes down to a certain level.

Stock losing value
Stock losing value
Read the investment newsletters and watch the financial advice shows on TV — even if they’re giving out good information, you’re getting it late, too late to have any positive effect on your portfolio, but just perfect for losing money.

What not to do

If you want to make money, not lose it, you have to buy it before it starts its climb — but you don’t have access to that kind of privileged information, so don’t worry about that. The very best way to make money is not to get in on the trend as it starts to happen, but to cause the trend to happen in the first place. However, it takes a lot of investment muscle to make that happen, which you don’t have.

Of course, manipulating the market is illegal. But if something happens — like a labor strike or a major storm — this will cause the market to move on it’s own. The big players will “push” the highs a little bit higher and the lows a little bit lower, “making a killing” along the way, and if anyone asks if they’re doing anything to manipulate stock prices, they only have to say, “look at the news — that’s why that happened”.

But you are very important to their plans — because if anyone is going to make money, someone else has to lose it.

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