How to Beat Wall Street at Its Own Game
In the investing world today, institutional investors are the Goliaths. They’re staffed by very bright people with unlimited resources and extensive teams of assistants.
The U.S. stock market’s total capitalization is $40 trillion. The top 500 money managers have close to $94 trillion of assets under management … or over two times as much.
And you, the average investor with $100 million or less, wonder if you stand a chance at outperforming them.
And I tell you, you absolutely do.
In fact, most of the institutional investors’ strengths are actually their weaknesses. And the knowledgeable investor has the advantage.
I have identified three stumbling blocks. They make mediocre performance the norm for institutional investors. And I’m being kind.
You see, in most years, more than 90% of institutional investors underperform the S&P 500 Index. It’s the yardstick of stock performance.
Let me show you why.
In this video, I discuss:
- Three stumbling blocks for institutional investors.
- Your edge over big money management firms.
- And how most average investors turn their edge into a disadvantage.
Use Your Advantage to Make Money
As a small investor, you have none of these restrictions imposed on your selection of stocks to choose from.
You know that over the short term, stock prices move based on fads and popularity. But over a three- to five-year period, stock prices move based on the earnings of the company.
To you, it really makes no difference if the latest government report came in 0.01% higher or lower than expected, or that it caused the stock market to take a dive.
Over longer periods of time, this doesn’t mean squat.
You use those opportunities to scoop up shares of great companies selling at fire-sale prices. You back the truck up and purchase “ugly ducklings” — stocks that are not popular or are in boring industries.
Thousands of companies that offer great value in excellent industries but have small market caps are available to you.
In addition to no limitations on market caps, there are also no restrictions to any particular sector or geographical location. It’s like standing in line at a buffet — you can choose to eat from any dish offered.
Being an institutional investor is like being in that same buffet line but having high blood pressure, heart disease and diabetes — your choices are severely limited and bland.
Now, you are part of a club that knows how to take advantage of Wall Street’s soft spot.
So the next time you hear that Wall Street has the upper hand … smile … because you now know the inside story.
And stay tuned for my video next week. I’ll be discussing why hard work and a high IQ don’t equal making money in the stock market.
Editor, Alpha Investor Report
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