As an investor, you probably spend a great deal of time considering the assets and stakes that comprise your portfolio. Given the tough economic climate, this level of scrutiny is more important than ever. The current condition of the U.S. economy, the health of its financial sector and the state of the world market as a whole can make anyone question whether they are making sound investment choices.
You may be tempted to play it safe and park your money in some trusty, no-risk stocks. While many businesses are struggling, surely huge corporations like Apple, Google and Wal-Mart are great selections – right? Unfortunately, the reality is a bit more complex than that.
The truth is that the modern day stock market is no longer a safe way to invest and grow your wealth. In recent articles, we discussed the rise of the high-frequency trading (HFT) algorithm, which enables some financial companies to effectively front-run most market participants before they can even react to a price change or earnings announcement. While this in and of itself is a huge issue, there are other structural and cultural issues with the stock market as well.
Rapid price changes due to a bad quarter or administrative shake-up often leave stock investors in a bind. If a company's stock value begins to plummet, all a regular investor can really do is either dump their shares or wait it out. In extreme cases, a person could see their wealth simply wiped out entirely.
For example, on October 18, an early printing of less-than-stellar quarterly results led to a 8 percent drop in Google's share price. This effectively destroyed $24 billion in market value over the course of an hour. While the stock cost has recovered slightly, it serves as a reminder of the dangers of the market.
Thankfully, there are other ways to invest your money. For example, cash flow real estate offers investors a source of monthly income derived from quality rental properties. You should visit GreatWealthStrategies.com to receive your own "Free Game Plan Report" and start learning about different ways that you can protect your wealth and prepare for retirement.