I think you have probably identified the number one issue for most folks here, which is the state of our economy. It appears that the continued efforts to create a permanent underclass are working and it is not turning out to be any good for the majority of american citizens. We are all suffering from a serious deficit in expendable income and it takes real effort to reduce your spending enough to save for retirement.
The same problem with my country as well. Obviously, our stock market is small, but most of the people prefer to invest their money, if they have any, in deposits in bank or bond based funds. In fact, the number of small investors in the local stock market isn't bigger than 10,000, despite of the fact that we are about 20 million. Financial education is a major problem everywhere in the world, from what I see. Yet, without it, it will be impossible for most of the people to ever own a house or send their kids to a good college.
The problem is, and there is truth in this.. if you are a newbie, you are going to get taken advantage of by more experienced people. If you don´t know anything about investing, it is difficult to tell the difference between honest advice and motivated advice. With any new hobby, one thing I always say is learn first, spend money later.... with investing, that doesn´t work well. You can´t really invest unless you spend money, and if you are new, it isn´t easy to know who to trust.
Definitely a fair point of view. However, people often think that in order to win money from the stock market, they have to beat the market. Definitely false! Average returns are still good and way better than those bank accounts with an interest of 1,25% per year. Moreover, once you get your hands dirty a bit, it's easier to learn about the market. You don't need to be a professional trader to make a profit, but you have to invest wisely, preferably in blue chips or in index funds.
Yeah, but the problem is that most new investors dont´think like that.. they jump on the latest fad stocks and don´t understand anything about PEG or EPS. You are going to have a hard time convincing someone to buy J&J, PG or Coke rather than whatver is the latest fad store at the mall.
http://www.cnbc.com/2015/08/19/age-based-investing-has-some-problems-experts-say.html Age-based investing "guidelines" may not be not be for everyone. CNBC epistles can be lightweight, but this piece may be particularly useful for some getting started in the business of investing. Traditonally, younger persons should start with mostly stocks, assuming more risk, and older persons should shift from stocks to a higher percentage of fixed income investments for guaranteed income. The writer offers a number of discussion points suggesting alternative thinking involving risk tolerances. (I'min the camp of older, but still have a significant risk tolerance... without being stupid.) Food for thought, but certainly not gospel. HTH. YMMV.
Good point about age vs risk tolerance, etc. I know some wealthy older people who keep very little in bonds. They find that they easily meet their relatively modest personal income needs with minimal bond exposure and some dividends from stocks, REITs, etc. They invest the rest of their fortunes relatively aggressively for growth, since this is money they plan to pass down to future generations.
