Chapter 5
Building Wealth with Stocks
In This Chapter
Getting to know stock markets and indexes
Buying stocks the smart way
Understanding the importance of price-earnings ratios
Learning from past bubbles and periods of pessimism
Sidestepping common stock-shopping mistakes
Taking steps to improve your chance of success in the market
Some people liken investing in the stock market to gambling. A real casino structures its games — such as slot machines, blackjack, and roulette — so that in aggregate, the casino owners siphon off a major chunk (40 percent) of the money that people gamble with. The vast majority of casino patrons lose money, in some cases all of it. The few who leave with more money than they came with are usually people who are lucky and are smart enough to quit while they’re ahead.
I can understand why some individual investors feel that the stock market resembles legalized ...
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