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A question on the stock markets...are they too volatile to be safe?

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Peacetrain Donating Member (1000+ posts) Send PM | Profile | Ignore Tue May-11-10 11:38 AM
Original message
A question on the stock markets...are they too volatile to be safe?
Many of us are all in the stock markets whether we realize it or not.. From defined pension plans to 401-K's and IRA's.. to saving for our kids to go to college in college plans.. its all in the markets.

Now I will be the first to admit.. I have some knowledge, and that in an of itself can be a dangerous thing.

So let me set this up.. Yesterday, I was listening to some economic talking heads rattle on about last weeks 1,000 point drop.

One thing I did not realize, is that over 60 to 70 percent of all trades are now automated.. that is huge.

So the stock market really is a gamblers paradise with a few throwing the dice and using our money to make the throw.

One of the commentators brought up something that is being tossed about that I had never heard before, and my first inclination was HECK YES.. lets do that.. but it may not be feasible.. so here it is
..

Could we have a 2 tiered stock market.. one for long term investors in companies (where most of us think we are, but aren't)

And a mirror market for those who want to use high automated trades to jump in and out of companies as many times as they want in a day?

Would it even be a feasible thing?

It sounds good on one level, but totally inoperable on another..

Does anyone have any insight into something like this?
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ladjf Donating Member (1000+ posts) Send PM | Profile | Ignore Tue May-11-10 11:41 AM
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1. Lately, yes. nt
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jaksavage Donating Member (1000+ posts) Send PM | Profile | Ignore Tue May-11-10 12:40 PM
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2. Tbills
are safe.
The stock market is a gamble.
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Swede Donating Member (1000+ posts) Send PM | Profile | Ignore Tue May-11-10 12:42 PM
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3. Volatility makes you money in the long term.
Buy and hold as the saying goes. When you get older move your money to conservative investments.
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gravity Donating Member (1000+ posts) Send PM | Profile | Ignore Tue May-11-10 12:43 PM
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4. Stocks are always too volatile unless you have a long time horizon
If you need the money within five years, I would move it into bonds.
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