Topic: How To Invest

What is Pat’s commentary for the week of February 12, 2019

Article Excerpt

The investment industry offers multitudes of choices—far too many for anybody to be able to give deep consideration to each of them. We deal with this “information glut” by making few if any recommendations in segments of the investment universe that seem to us to have a flaw that can work against investor interests. For example, we don’t recommend any investment plan or product that needs to succeed in stock options dealings to make a good return for its investors. Of course, some options trades do pay off—after all, somebody has to win the lottery. But most options traders wind up losing money or, at best, making too small a return to justify their risk or cost of capital. The real profits in options go to investment firms that “make a market” in options – that is, they act as an intermediary between option buyers and option sellers, and make a sliver of profit on virtually every trade. Some mutual funds and other…

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