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action, including more than $100 million in fines and penalties, against a group of the largest market makers, to cure abusive trading practices, including collusion (another word for price fixing) and backing away (quoting a price, but not honoring it). The result of these regulatory actions has been to give the Sixth Market trader the opportunity to have equal access to valuable information. |
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Until the mid-1990s, the active investor/trader community was quite small. The vast majority of Americans who owned stocks relied on a personal broker for advice, recommendations, and trade executions. A conventional belief system had developed that held that investing in stocks was a difficult and complicated process which was best left to the professionals. And there was just no way that any normal person could even think of being a trader! |
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It is truly amazing that, at the same time that all of these other profound developments we have been discussing were taking place, perhaps the most amazing development of all was happening. A new kind of investor was being created, one who was embracing trading. |
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This investor had a belief system that was radically different from preceding traders; |
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One believed that there was a place in one's portfolio for long-term investments. This investor was comfortable with using a market professional (money manager, mutual fund, or pension fund) for that purpose. |
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One believed that, in another part of one's portfolio, one could make more money trading one's own stocks than by investing on the advice of a stockbroker. |
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One believed that trading was just another skill that could be learned, and one anticipated the challenge of mastering those techniques. |
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One believed that one did not need someone else's advice, and that one was fully capable of gathering and interpreting the information one needed to make an informed trade. |
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One believed that one could fit the trading of securities in among the other demands in one's life. |
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One believed that the traditional stock broker did not provide a service that was worth the traditional commission charged. |
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