Enron… Anyone?

The Smartest Guys in the Room?

There’s an old adage ‘the only thing you can bet on in life is death and taxes’ and there’s a good reason for that. It’s true.

Gambling is defined as ‘betting or staking of something of value on the outcome of a game or event’. …even ‘playing the stock market’ falls clearly into this definition.

If we could predict the trends of companies and the economy we would all be rich….but obviously we can’t.  It’s impossible to accurately predict our economic future. Just look at the 500,000 small  Australian businesses that crashed in the recent Global Financial Crisis. I doubt even John Edwards would have seen that one coming.

If you are intent on playing the stock market check out these surefire ways to loose reddies in an instant;

If you are a newcomer and you have a few dollars to invest it’s easy to get sucked into putting on random trades based on gut feelings.  This will inevitably end in disaster.

Even if you do have advice it usually prompts you to make as many trades as possible to attempt to make more money. This is a fast track to losing more money and paying more out in commissions. Advisors are there to make money and profit from you.

A sure fire way to lose money faster is to go for a company that will sell you the idea of a bigger margin. The higher the ladder, the bigger the fall.

When things go wrong and your share prices are sliding downwards faster than a playboy bunny on a slippery slope you may panic or even worse you won’t want to sell and then be forced to when things hit rock bottom.

Let’s look at it in perspective, if you own shares in a company and and it goes bankrupt you will lose 100% of your shares.  Even if you buy into an established company and it goes bankrupt, it’s going to be baked beans for dinner until you can recover financially. If you’re still in doubt just think of the company Enron, a large energy company from Texas. Large numbers of investors lost their hard earned money when they declared bankruptcy.

There are many ways to lose money on the stock market, such as the market going down and careless trading.

For information on problem gambling and how to help visit http://www.gamblinghelp.nsw.gov.au

Read more: How Do People Lose Money on the Stock Market?: Stocks & Bonds | eHow.com http://www.ehow.com/video_4754698_do-lose-money-stock-market_.html#ixzz14NFwu8nR

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