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We were talking to an investor the other day, and he indicated he didn’t like the stock market because ‘the big players have all the advantages.’ He had heard about high-frequency trading, insider dealer, brokers manipulating prices and financings, and other nefarious goings-on.
This dismayed us. Sure, the market is not perfect, and scams occur. But for building wealth, we still think it is the best game in town. We just like the math: Even if you do get caught holding a scam company and lose 100 per cent, if you get a winner you will offset that loss many times over. This year has more than proven that. A quick Bloomberg screen tells us there are 116 stocks in North America up more than 100 per cent already in 2020.
So, to help our friend see the light, we are offering five reasons why you — the small investor — actually has an advantage over the “big boys.” As a former fund manager, we can assure you all of these are of significant advantage to the individual investor: we have been on both sides of the table here.