December 13, 2024

Costaalegre Restaurant

Learn marketing business

Froth in markets of late is reminder to stick to basics

The dramatic social media-inspired volatility of GameStop, AMC Entertainment and silver has been mesmerizing and disturbing. Yet in many respects the speculative frenzy was another signpost in the long-term evolution of the financial markets.

Communication and information technology advances have long transformed the financial markets. European merchant bankers used carrier pigeon networks in the 18th century to get an edge. The telegraph, the ticker, and the telephone in the 19th century allowed stock trading to become a national business dominated by Wall Street. Financiers poured trillions into proprietary quicksilver communications networks in recent decades.

Online day trading also became a phenomenon during the dot.com boom. More people than ever tried buying individual stocks.

Of course, the dot.com boom went bust. Since then, individual investors have increasingly gained access to sophisticated market information, while trading costs fell further with the advent of zero-commission trading platforms like Robinhood.

That said, my guess is with more reporting and studies we will learn that plenty of professional investors and Wall Street trading desks profited nicely from the social media-driven campaign that boosted GameStop and other companies at the expense of several hedge funds. Financiers will devote more talent and money toward figuring out how to make money off the buying power of the crowd in coming years.

Another insight drawn from historical experience is trying to beat the market is a loser’s game. The history of speculative fevers and the madness of the crowd is that these episodes end badly. If you are inclined to try your hand, the money should come from your entertainment budget — money you can easily afford to lose.

For those investing in the markets for retirement, children’s college education and other long-term goals, it’s far better to heed the advice of John Bogle, the late founder of Vanguard and index fund pioneer. “Don’t look for the needle in the haystack,” he said. “Just buy the haystack.”

Broad-based equity and bond index funds with their razor-thin fees in a well-diversified portfolio remains a savvy way for individuals to invest for the long haul. Nobel laureate William Sharpe told me years ago that indexing is “a dull, boring way to be a better investor than many of your friends.” He was right back then and now.

Chris Farrell is senior economics contributor for “Marketplace” and Minnesota Public Radio.

rn% endblock %","start":"https://users.startribune.com/placement/1/environment/3/limit-signup-optimizely/start"},{"id":"limit-signup","count":12,"action":"ignore","mute":true,"action_config":"template":"% extends "grid" %rnrn% block heading_text %Youu2019ve read your 10 free articles for this 30 day period. Sign up now for local coverage you wonu2019t find anywhere else, special sections and your favorite columnists. StarTribune puts Minnesota and the world right at your fingertips. % endblock %rnrn% block last %rn parent() rn# limit Krux pixel from https://www.squishlist.com/strib/customshop/328/ #rnrnrn% endblock %","start":"https://users.startribune.com/placement/1/environment/3/limit-signup/start"},"id":"meter-desktop-331","count":10,"action":"ignore","mute":false,"action_config":false,"start":"https://users.startribune.com/placement/1/environment/3/meter-desktop-331/start","id":"PDA991499opt","count":9,"action":"ignore","mute":true,"action_config":false,"start":"https://users.startribune.com/placement/1/environment/3/PDA991499opt/start","id":"limit","count":8,"action":"inject","mute":false,"action_config":"template":"

rnrnrnrn

rn

rn

rn rn

rn t

rn SUBSCRIBErn Already a subscriber? Log in.rn

rn

All Star Tribune readers without a Digital Access subscription are given a limited number of complimentary articles every 30 days. Once the article limit is reached we ask readers to purchase a subscription including Digital Access to continue reading. Digital Access is included in all multi-day paper home delivery, Sunday + Digital, and Premium Digital Access subscriptions. After the 1 month Premium Digital Access introductory period you will be charged at a rate of $14.99 per month. You can see all subscription options or login to an existing subscription herern

rn rn

rn

rn

rn

rn

rn","start":"https://users.startribune.com/placement/1/environment/3/limit/start"},{"id":"nag","count":7,"action":"lightbox","mute":true,"action_config":{"height":null,"width":"630px","redirect_on_close":null,"template":"% extends "shell" %rnrn% block substyles %rn

rn% endblock %rnrn% block page %rn#rnrn limit - count - 1 rnrn form.flow_form_open(nextAction: 'firstSlide', null, null, '_top') rn form.btn('Save Now') rn form.flow_form_close() rnrn

rnrnrnu2022 rnrnrnrn#rn

rn

rn

You have limit - count - 1 articles left

rn

rn rn u00a0u00a0u2022u00a0u00a0rn rn

rn

rn

rn

rn Save More Todayrn

Over 70% off!

rn

rn

rn

rn

99u00a2 for first 4 weeks

rn form.flow_form_open(nextAction: 'firstSlide', null, null, '_top') rn form.button('Save Now', 'btn nag-btn') rn form.flow_form_close() rn

rn

rn% endblock %rnrn% block last %rn parent() rnrn% endblock %"},"start":"https://users.startribune.com/placement/1/environment/3/nag/start"},"id":"x","count":4,"action":"ignore","mute":true,"action_config":false,"start":"https://users.startribune.com/placement/1/environment/3/x/start","id":"multi-start","count":3,"action":"fly_in","mute":true,"action_config":"location":"bottom_left","slide_direction":"bottom","group_id":null,"display_delay":"0","collapse_delay":"10","template":"

rn

rn

rn

rn u00d7rn

rn

rn

From just

rn

$3.79 99u00a2 a week

rn Save nowrn

rn

rn

","start":"https://users.startribune.com/placement/1/environment/3/multi-start/start"]};

costaalegrerestaurant.com | Newsphere by AF themes.