The Lazer Speaks

Many people ask me what should they invest in. Although I worked at the NYSE many years, I never traded a share of stock, nor did I act in an investment advisory capacity, or as a broker. I am often amused by Jim Cramer of CNBC, lecturing on the morning show before the 9:30 opening about what stocks are hot. He pontificates for a half hour about which stocks to buy or sell, and then at the end of his segment, there is a disclaimer that CNBC runs, that states that the preceding half hour was deemed to be “entertainment” and not investment advice, and that Jim’s views are his own, not CNBC’s, and if you do invest please consult a professional. So for the protection of The Rockaway Times, please note that the following views are my own, and are for entertainment purposes only, and if you can find a professional, please consult them!

Over the years I did observe several practices that I thought were healthy when it came to investing. The first was to do something called dollar cost averaging. It’s a simple concept really, the idea being that you buy stocks over time, averaging your cost as you do so. This avoids the buy low, sell high syndrome that so many fall prey to. Many brokerage firms allow you to do this by transferring a certain amount of money each month and continually buying small chunks. Thus your cost of ownership is averaged across both good markets and bad.

The second important observation I made is that the market is for the long haul, not short-term gains. The idea of making a “killing” in the market is a fallacious one. The idea is to invest, not “trade.” There are too many sharp, computer-aided traders in the market. You will never beat them. But you can outlast them. The most important lesson for me was knowing when “not” to sell. I lived through the 1987 crash, the 2008-2009 meltdown and the 2010 flash crash, and what I learned was that no matter how far the market went down, not to sell when it did. There is something called reversion to the mean, which basically says that anomalous dips will eventually revert back to the average. And in each of the cases above that was true. Of course you have to have the time and capital to wait it out. If you need that money for the weekend concession stands this summer, the market is probably not the place for you right now.

The third important thing I learned is that it is hard to pick individual winners, and harder yet to track them. It’s a lot easier to track the market as a whole, and there are mutual funds that do exactly that. So if the Dow Jones or S&P is up for the day – it’s reported on the news everyday. If you invested in the “All American Dodo” company because your second cousin twice removed had a hot tip, it might be hard to know how that stock is doing. That’s not to say if you invest in companies you know, products you use, that you wouldn’t do well. Believe me, a portfolio of Coca-Cola, McDonald’s, Nike, Snap, Google, Amazon, and Apple to name a few would be pretty good too. But take a look at those names and realize that they all are or will be in the S&P, so why not buy the fund? This way you can tell people that not only are you in the market…you own it!

By now you are probably saying, come-on Laser, you were right there on the trading floor everyday, give us a really good tip. Ok, ok, here it is, the inside scoop, the thing to invest in is your Mermaid! First you have to do the research to find the right Mermaid, they are all different you know. Then you need to start investing in that Mermaid because the dividends are ever increasing and last a lifetime. That is the best investment anyone can make!

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