Ever noticed how Mutual Fund companies never talk about anything but 'investing'...for the long haul? Ever noticed how even when 'day trading' became such a hot item, that stocks were the only thing they traded...and most still do? The public doesn't know this -- that while the mutual fund companies with all of their advertising keep the public thinking 'investing', they, themselves are day trading with their clients' money. Unless you understand how 'shorting' works, you might think they couldn't legally do that...and get away with it, but they can, and do...and on a massive scale! Yes, what they get away with is legal.
Think about what the average mutual fund makes for its owner per year: 10-15% appreciation growth (if the stock market has a good year). Did you know that a 2005 survey ---to evaluate the value of mutual fund managers to their clients -vs-what they get paid, showed that the average annual salary of mid-level mutual fund managers was $472,000 dollars, and senior-level managers made over $750,000. The irony of it all is that they justify their performances by comparing them to what the S&P 500 Index does: bragging if they beat it, and consoling their client with "Well, the S&P went down, too." when they have a losing year. Regardless, they always get their salary 'bonus' though!
If you are an investor (in a mutual fund) or among the growing army of stock day traders (who have never known anything but stocks), you owe it to yourself to look into the 'e-mini' and discover the tremendous advantages it offers. Yes, trading is where the ACTION is in the stock market, and those who discover the e-mini always end up saying to themselves: "Oh, my...why didn't I learn about this earlier!" It's only been around since 1997. How has it been kept such an Insider secret?
Here, now....I'll just state two little things that I really appreciate about e-minis; then in my next post, we'll go into some depth as to why... if you learn to trade e-minis, you'll never again trade stocks (let alone invest in them).
How about 'bag for the buck'? (ROI for the sophisticated)
You can open an e-mini trading account with just $2,000 dollars. It's very common for a good e-mini trader to make $500 a day (the daily goal of most e-mini traders). What is the rate of return on one's $2,000? Is it not 25% a DAY? I keep $10,000 in my trading account so my daily return on the $10K is only 5% a DAY. How's that for 'bang for the buck'? How does that compare to the average mutual fund's performance?
The second thing I really appreciate is that you can do so much more with so much less money: It's called 'leverage'. You buy a stock (even just to trade it) and you have to lay out the market price of the stock. Yeah, if you've got 'margin' in your account, you can buy $2 of stock value for every dollar in your account (2-1 leverage). But, how many shares of even a $5.00 stock would you need to buy (and have in a trade) to make $500.00? Not only do you have leverage with e-minis of about 90-1, an e-mini trade is seldom OPEN for longer than 5-minutes!
If this catches your attention and peaks your interest, join me here next time.
Mel Hardman
http://www.emini-forex-trader.com/forex-emini-trading
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