high-minded drivel

high-minded (adjective) - refined; cultured; particularly civilized. drivel (noun) - senseless talk; nonsense.

Wednesday, September 14, 2011

Probably not a good investment of your time

We shall begin this blog post as we do every blog post, with a look at the day's stock market news, courtesy of Stock Market Today...

The downturn in the market has nothing to do
with economic conditions, and everything to
do with people finally acknowledging that a
bull would never beat a bear in a fight
The Dow Jones Industrial Average (known to friends as "The Dow," or to really good friends as "DJ") finished up 1.25%.  It was bested by both the S&P ("Stealth & Power") at 1.33% and the Nasdaq ("The Nasty Nas") at 1.57%.  Some analysts interpreted these outcomes as a real clash of the titans, being decided by only a few hundredths of a percent, but wiser investors saw these numbers for what they really were: a classic case of one market standard taking a dive in the 5th round and letting others win in exchange for under-the-table bribes.  Needless to say, the dirty money is delivered in cash, not stocks.  In terms of individual stocks, the big winner on the day was Transcept Pharmaceuticals. The big loser was Leapfrog Enterprises, a company that "designs, develops and markets a family of innovative technology-based learning platforms and related proprietary content for children of all ages at home and in schools around the world."  Silly Leapfrog!  People don't want education!  They want drugs! Finally, among commodities, Corn had the most positive change at +2.19%, while Silver lost out with a 1.6% decline, leading to immediate speculation that the Olympic Committee, in preparation for the 2012 London summer games, had abruptly scrapped tradition and suddenly invested in a new second place finisher's medal.  More specifically, an edible one.

Of course, this is all "tongue-in-cheek" commentary (whatever that means).  I'm no market analyst, and Stock Market Today was just the first site that came up on a Google search.  In fact, I only bothered to link to them because the various percentages I've noted were legitimately taken from their site.  You'll have to forgive me for getting carried away in my fervor.  You see, I'm in an investing mood.  For some time now my savings account has essentially sat dormant, gaining next to nothing in interest per year, but I finally woke up and realized that those finances have not earned a rest, and must be put to work.  It's like having a teenage son who has grown over time, and suddenly you look and see that he is bigger than you realized, and he is loafing on the couch.  So metaphorically speaking, I'm taking my teenage savings account and telling it to get a job, for the love of God, and to start bathing more regularly.  Time for Savey to start earning its keep.

Hi!  I'm very trustworthy, as you can tell by the way I'm
holding my pen as if I'm preparing to jam it into the side of
your neck.
I really have my bank to thank for this kick in the pants.  One day as I was making a deposit to my savings account, the teller said to me "We have a guy who comes in once a week to talk with people about possible investments.  You might want to talk with him."  Despite having gone to business school, and despite having earned a business degree at said business school, I've never had a "money mindset" that looks at the world in terms of how I can make more green.  I have a good job, and feel that I spend wisely, but many other considerations are closer to the forefront of my mind than the consideration of how much my personal wealth is increasing year over year.  I expect that some of my former classmates are already well on their way to their first (or second) million, because they do have this mindset, and very naturally gravitate toward and understand the world of investing.  Because the truth is that people don't get rich by having a job and earning a salary.  People get rich by magically turning their money into more money through the mechanism we commonly call "the market."

Fortunately, I do have enough sense to say "Ouch" when slapped in the face, and so I decided that it would be a good idea to figure out some ways to put my savings to use.  Being a fairly conservative person in general, leaping headlong into the world of stock trading holds no appeal for me.  And truly, I struggle a bit to evaluate the various investing options and determine which ones are the best deals.  But I figure that even if I invest conservatively, and even if I'm getting an option that has slightly higher fees than another option, earning some money is better than earning no money.

Paying dividends, pronto (uomo)
Now, I understand that taking the step of talking to a financial advisor is no guarantee of untold riches, and in fact holds the potential for making me worse off.  Right now, my money is lazing the days away, drinking beer and eating potato chips, but at least it isn't going anywhere.  When you enter the world of investing, you stand the chance of losing that money, especially when a financial advisor wants to play games and take some risks with your dollars to see how good they are at their chosen profession.  And a person with some self-doubt about their financial know-how (which, if you think about it, is the only type that would ever go to a financial advisor), may seem like an easy mark.  But I've taken some measures to guard against getting duped, fleeced, taken advantage of, or otherwise hoodwinked.  No "too good to be true" deal is going to catch me unawares.  Why am I so confident?  Because I've done my reading and feel like I've gotten a good grasp on things now?  No!  If that were the case, I wouldn't be going to the financial advisor, remember?  Plus, that would mean I'd done some real work and thinking, which I just can't be bothered with while A Song of Ice and Fire remains unfinished.  Instead, I took the much more enjoyable and surefire route to success: I bought a couple new suits.

A wise man once said "You have to spend money to make money," and he was probably talking about spending money on a suit so that your financial advisor knows you mean business and consequently leads you to the best investments, thus allowing you to make money.  While a common investor may get taken for a ride, so to speak, a suited investor will get taken for a ride in a convertible.  The common investor will wonder if the questions they are asking are appropriate and sensical, while the suited investor will confidently plunge ahead with inappropriate and nonsensical questions.  The common investor will hesitantly sign on the dotted line to transfer their money to a new account, unsure of their decision, while the suited investor will dash off their signature with a devil-may-care attitude, and then pocket the bank's pen.  Are you getting the idea here?  To boil it down, the common investor is in the passenger seat the whole time.  The suited investor is in the passenger seat......but in a convertible!

Depending on how you look at it, you can be in the
passenger seat...and still be in the driver's seat.
Since I've already shared so many insider secrets in this post about investing, let me share a few secrets about buying suits as well, for your benefit.  While I felt pretty good throughout the suit buying process, I realized I'd been played for a fool to some extent when I looked at my final receipt.  Here's how it works: You go into the store, a store employee offers you assistance, and you start trying on suits.  The store employee gives you some basic suggestions, compliments you occasionally, and has you look at yourself in the mirror for each suit you try on.  You feel like you're really in charge, and as the power goes to your head a bit, you find that you like looking at yourself in a suit.  After you finally pick out the suit you intend to buy, the store employee has you get in front of the mirror again so that they can mark the suit for some minor adjustments.  "Take it in a bit here?"  Sure.  "Maybe take the sleeves up just a hair?"  If you're suggesting it, I suppose we should.  So on and so forth, rather miniscule adjustments that don't really affect the overall appearance to the naked eye, but the store employee has to do their job.  Okay, then comes the "upselling" portion of the experience.  This is where the store employee makes the last ditch assault to get you to spend more money.  They suggest a new pair of pants to wear with the suit jacket as a second option.  They magically produce various shirt-and-tie combinations that go with the suit and have you look at each one to show you how stylish you will be with the complete ensemble.  This is where you have to hold firm, resist the upselling, and get out of there with your suit.  It's like the financial advisor saying "Maybe we should take a little more risk" when you've already met your objective for getting a solid return and have no good reason to change it up any more.

But you have already been had, you poor wretched creature.  Remember those "minor adjustments?"  Taking it in at the back by a fraction of a fraction of a fraction?  Bam, that's an extra 30 dollars you just spent.  Taking it up a hair on the sleeves?  That's a 20 dollar hair, and you'll never even notice the difference.  Your pride in not being upsold is now in shambles, as you realize you were getting upsold the whole time, and the last part with all the shirt-and-tie combinations is just for the true simpletons.  I guarantee you that even if the suit needs no adjustments whatsoever, the store employee will suggest an adjustment, because they are not in the business of making you look good, as you naively believed, but rather they are in the business of squeezing every last dollar they can out of you.

Fortunately, I don't have to worry too much about spending that extra amount on my suits.  Because after I  make my new investments and start generating some interest on my savings, there should just enough to cover those little extravagances.

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