Why a 24/7 Stock Market Is a Wealth Killer – Not a Wealth Builder
Here's how to protect yourself ...
At the New York Stock Exchange (NYSE) – also known as the “Big Board” – the “bell” has become a star by itself.
The iconic bell rings at 9:30 a.m. to welcome the trading day. And it rings again at 4 p.m. to bring trading to a close.
Some of this is choreographed. The NYSE brings folks in to “ring the opening bell” – eventizing the trading day’s start (CNBC usually covers this – even naming the “celebrity bell ringers”).
This neat bit of pageantry matters.
The reason: An estimated 58% of American households buy and sell stocks during that 6½-hour window.
But those stats may soon change, as the NYSE is gauging the appetite in a survey for a system where stocks are trading 24/7/365.
On a “pros” and “cons” list, the pros side is short.
You could argue that 24/7 action “modernizes” the stock market. And if there is demand for it, then the “free market” is doing its thing – meeting demand.
But for retail investors – most folks – having the ability to invest any time of day could be a Wealth Killer.
Bill’s Investing Takeaway
“When it comes to investing – to building wealth – the simpler you keep things, the more likely you are to succeed.
On that point, this 24/7/365 option stands as a hefty potential distraction … as a new ‘shiny ball’ that exacerbates the growing-and-dangerous ‘gambling mindset’ that’s infecting far too many of today’s retail investors.
Right now, most investing takes place in two windows … the first right after the market opens … and the second just before the market closes.
Even that tells me that too many retail investors are taking the ‘bad end’ of institutional trades … acting on the dopamine hit of a breaking news item, something a commentator says on TV, or a tip from a friend or colleague. There’s no ‘cooling-off’ period … you know, a stretch where even the savviest Wealth Builders can take stock of the investing they are considering – before taking action.
Retail investors lose when they take the ‘other side’ of institutional trades. They win when they rigidly scrutinize the stocks they’re looking to buy.
They win when they put time on their side.
Protect your wealth by sticking to your plan. Do that and you’ll inoculate yourself against the ‘gambling virus.’
That’s how you win.”