How Wall Street Works

Posted on February 9, 2010 at 4:09 PM PST by

The veil over how Wall Street works is slowly being lifted. Wall Street’s real mission isn’t to help you make what the markets return, rather it’s to keep your money in their control so they can use it to take some of those returns for themselves. No wonder Wall Street wages a constant propaganda machine to convince you that brokers can help you beat the House. But if you believe their message, you are simply being duped. As in a casino, no one really beats the House because the odds are stacked in favor of the casino — an Investing 101 concept oftentimes ignored. Even if someone does win big on occasion, the odds eventually catch up and the winner will lose.
Look at all the media attention that Wall Street buys in an effort to keep you at the table. Think about all the newspaper ads and fund prospectuses boasting stellar returns. Consider the relentless flow of guests on financial programs and websites touting their stock-picking expertise. Add to that the millions of dollars spent on investment magazines, financial newsletters and other efforts to keep Wall Street in your face. It’s all about keeping your money-and keeping you convinced that you can beat the House. Wall Street wants disempowered investors. They want to make sure beginners as well as the average investor see investing as complicated, confusing and something to be handled only by “experts.” So when you read their stories about how complicated the market is, and how you shouldn’t try this at home, just consider the source. Keep in mind that Wall Street is selling market mystique. By convincing you not to take on added risk by doing it yourself, they keep their hands on your money and stay profitable.