Spice Up Your Life With a Little
Volatility
Is your life turning into a dull boring routine?
Then spice up your life with a little volatility. Let's take a look at what's happening here. Mutual Funds are getting huge inflows of cash that must be invested. By their nature they are so diversified that you will be hard pressed to find one that has a high volatility ranking. The stockbrokers, like the casinos in my hometown (Las Vegas), make money because of the volume of dollars that flow through the "house". There are always some bucks that come out of the middle. That's what your commission is all about. Commissions, however are getting cheaper. Brokerage houses need to make more money. One way is to increase the volume of trades, (or turnover) by encouraging Market volatility. They used to scold the brokers for "churning," but now the Market churns itself. Here's the conflict: Mutual Funds, dull, boring, gray; individual stocks, hot, jumpy and bumpy. What's an investor do?
Just mix and match to your own specifications. Put money in both types of investments and add a little spice by speculating on an issue that climbs and dives and flies all over the place. How you divide your dollars is up to you, but remember your heart condition and what happened the last time you rode the roller coaster. Usually, a small amount speculated on a high risk is enough to keep me awake all night in anticipation of the morning bell. Speculating on volatile stocks is risky, so if you want to take a test drive first, put lots of Wasabi on your Sushi and then check your endorphin levels. Pass the test? Then go for it. Warning, that's how "day traders" get started: eating Sushi.
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