Where Has All the Trading Gone? Volume Hits 4-Year Low

[WestSeattle2]

Source: CNBC

Let's see, Wall Street has become a legalized pump and dump operation and they wonder where the traders are? Seriously?! I stopped contributing to my 401k four years ago after it became obvious that our financial services industry was being managed by liars and thieves. Instead I'm paying off my mortgage and other debts.

You may see the value of your stock holdings rise for a time - but why? Cheap money chasing the only short term investment with a modicum of return? Yet another bubble created by the Fed/Goldman Sachs? Fool me once, shame on you; fool me twice shame on me.

The sure thing, which no one can steal from you, is to pay off all debt including your mortgage(s). Retire with no bills and lots of cash in the your local credit union. Keep your assets out of the hands of liars and thieves. What a concept!

Read more: http://www.cnbc.com/id/47005811

[bemildred]

1. If people want to gamble and get ripped off, they can go to Vegas.

And Vegas at least is well-regulated and somewhat honest.

[amandabeech]

12. I hear that the food, entertainment, pools and golf courses are also pretty nice.

Even for older ladies.

[cyberpj]

2. What about the money from 401k company matching?

Everyone is always saying at least contribute the minimum required to get the maximum company contribution. Advisors call it 'free money'.

Since beginning of 2008 we have been saving 6% to the dollar-for-dollar valued Retirement Savings Account just to get the company's 3% contribution. We avoided the big crash but are making a constant 3% on the company, right?

No credit card debt and a very small mortgage here.

?

[JoePhilly]

5. You also get a tax break on that money.

Its not taxed as ordinary income.

[cyberpj]

7. Yep. Forgot that one. nt

[WestSeattle2]

6. Whatever works for you! My employer didn't and doesn't offer matching

funds, so there is no free money. I think the bottom line is to do whatever allows you to sleep well at night. After watching my 401k drop 40% and my house value plummet by about as much, I'm just very leery of placing my retirement finances in the hands of others. Especially those who have been exposed as liars and thieves.

[JoePhilly]

3. Ummm ... the author seems to not realize that ...

we had a market crash, and then a highly volatile market during the 4 years in question.

Oddly, the author doesn't notice in the graph they used, that during 2006 and 2007, volumes were basically flat, and at a level BELOW the level the author now claims is LOW.

A volatile market tends to increase volume, because as some jump out, others jump in. When the market is more stable, volumes tend to flatten out.

Now ... this is not an absolute, but the author should probably mention that reality as one potential explanation.

One could just as easily argue that the drop in volume, a drop back to pre-crash and pre-recession levels, could reflect a stabilizing market. One with less volatility.

[JDPriestly]

8. I note that I still pay hefty fees to the companies that

"manage" my 401(K) -- all except one.

I do not trust the "financial services" industry one bit. They mostly just serve themselves. Sorry. But from the looks of the 401(K) statements I have seen (and I haven't just seen my own), that is the story.

[Kolesar]

15. Principal Financial has horribly large fees on their "funds"

My wife's former employer used Principal and I was horrified at the fees. Way over 3%/year

[JoePhilly]

16. Well ...

My 401k would beg to differ.

My wife and I have been maxing ours since around 1993. Between the tax breaks, the company match, and the growth, its all good.

Now, I do actively manage my 401k. My 401k has a very wide array of investments. It includes stocks funds, bond funds, all varieties of global investments, and even some money market choices that are basically "cash".

I've found that by simply tweaking my portfolio, I do very well. When the market moves ABOVE 52 week highs, I move more money into the CASH side ... if the market drops, I take the cash I accumulated, and I start to move it back in.

I'm not saying that the fees don't matter, and some 401k plans suck big time.

But the claim that all 401ks are bad investments is silly.

And past that, do you think I was wrong on the volatility point?

The OP says "pay off your mortgage" ... given the recent collapse, if you paid off your mortgage when it was 400k, and now you can only sell for 200k ... is THAT a great investment? You locked up 200k in loses. You don't have it available to invest somewhere else.

There are no magic bullets.

[still_one]

4. What you do is buy quality companies that pay good dividends, and ignore the analysts and

manipulators. Don't care if the market goes up or down, you will still get the dividend

It is pretty much the Buffet strategy, and you would be holding for long term

What is the advantage?

You are not a sucker? You start to get cash flow from the dividends

A lot of 401Ks today allow you to self-direct your account, you can even have a 401K Roth for some which means no tax deferred now, but tax free later

Everyone's situation is different, however, a well diversified portfolio with good companies that pay dividends will pay off in the long term.

In the meantime, a portion of the money can go into a GNMA fund, maybe not a lot since interest rates a so low, but it is guaranteed by the full faith of the U.S. government

If you are not contributing to a 401K and can afford it, you might want to consider opening a Roth

[JDPriestly]

9. Companies that pay good dividends? Do they exist?

[dmallind]

11. Averaging 7% annual on mine

ATT (woops that's the now defunct preferred stock I had - common is T of course), WBK, DUK, TEF, LLY are a nice set for dividend chasers. GE too but you've missed the big price gains there.

[still_one]

24. and you are spread out, not all in one company. /nt

[HereSince1628]

13. Yes, there are some companies paying more than banks. n/t

[Art_from_Ark]

18. That's not saying a whole lot

considering that a lot of banks are paying close to zero %, or even charging depositors fees to hold their money.

[HereSince1628]

21. True, banks are paying very little.

I doesn't take a lot for a stock dividend to beat the rate on a savings account.
The other thrift devices available from banks don't pay like they once did either.

[Art_from_Ark]

28. When I started my first bank (savings and loan) account in 1967,

it was paying 5.25- 5.5% on simple passbook savings, even for little kids' accounts (like mine). There were no maintenance fees, no time limits, and small-time depositors were encouraged to make small-time deposits (by, for example, handing out "dime kitties" that "kiddies" would fill in with 30 dimes, presumably to deposit into their account upon completion).

[HereSince1628]

31. True. Things have changed as the monster got greedy.

[Art_from_Ark]

34. Dime Kitty

http://beatinestthings.blogspot.jp/2007/10/dime-kitty-lynchburg-va.html

[still_one]

22. Absolutely. Most of the major pharmecuetical companies, PG, KMB, MCD, on and on /nt

[TheFarseer]

26. yes, check out

Bristol Myers Squibb, Dominion Resources, Duke Energy, Eli Lilly, Lockheed Martin, Merck, Novartis, AT&T Verizon, Waste Management - all over over 4% dividend. I've found exchange traded mutual funds that pay over 10% and I just hold on and let them pay me.

Much better than the 0.15% I can get at Wells Fargo for a 12 month CD. You mean I can invest 10,000 for a year and get back 10,015???? Wow, where do I sign up?

[sendero]

20. The price can still be manipulated.

.... and it will.

[still_one]

23. let them, you will collect the dividend, and screw the manipulators. don't play their game. I know

a lot of people do not feel comfortable buying individual stocks, and have been throwing money into funds, but you are paying hidden costs in those funds, and if they are part of a 401K some of those costs are in excess of 1%

[raouldukelives]

10. Perhaps a large Christian group finally realized

that investing in Wall St is one sure way to pulverize any finger hold you may have had in your faith.
Maybe someone finally noticed that it is nothing more than so many people wrapped up in the literal 24 hour pursuit, thought & illusion of money with no concept of the human or environmental damages they increase in their wake. Hurrying to and fro from massive skyscrapers filled with the treasures of the world. Furiously punching the keypad of the newest third world electronic device as they sip lattes in the company of a golden calf.

Either that or confidence is down.

[AdHocSolver]

14. The Wall Street Ponzi schemes recently got a new boost.

It came in the form of the "Jumpstart Our Business Startups bill", which President Obama signed into law Thursday.


link: http://www.wibw.com/nationalnews/headlines/JOBS_Act_Opens_Fundraising_Doors_For_Small_Firms__146383845.html

(snip)
**********
It will soon be easier for small companies to raise money just like behemoths on Wall Street.

More access to fundraising, new investors and fewer regulatory burdens are all part of the Jumpstart Our Business Startups bill, which President Obama signed into law Thursday.

The JOBS Act, which received bipartisan congressional support, provides small businesses that need capital with many options that were previously out of reach. The provisions are aimed at helping fast-growing operations like biotech and tech companies, but mom and pop shops may benefit as well.

The Securities and Exchange Commission has several months to pass regulations fully implementing the law.

For startups or entrepreneurs in need of initial funds to launch an idea, the law redefines crowdfunding.

Previously, platforms like Indiegogo or Kickstarter offered companies a way to raise money from everyday folks. But contributors couldn't buy shares in a company itself and take part in its profits and losses.

The new law allows a company to use crowdfunding for seeking actual investors. It can raise up to $1 million this way. To protect investors, those with a net worth of less than $100,000 may now invest 5% of their yearly income or $2,000, whichever is higher. Wealthier types can invest up to 10% of their income.

"There's more reason for an investor to give them money," said Matthew Kaplan, a capital markets lawyer in New York. "They'll get a piece of the upside."
**********

The fleecing of the lambs is about to begin anew.

[lib2DaBone]

17. All the stimulas money went to Wall Street... ended up in the stock market..

Stimulas money NEVER made it to the American People.. the ones who are paying for it.. (stangely enough)

The stimulas money went to the Bankers and Hedge Fund Hyenas.. who invested in the Stock Market.

Now that the stimulas has ended.... so is the Stock Rally...

Now American will pay thru the nose for Gas and essentials.... and it's BUSINESS AS USUAL in Washington.

[sendero]

19. People are wising up..

... that's why. The "retail investor" is only allowed to participate so he can get fleeced. Some of us sheep have decided not to be sheared again.

I'll never put another dime into stocks unless there is major reform to remove the fraud (program trading for example) from the system.

[still_one]

25. Of course that is your choice, however, there are good solid companies with good results paying good

dividends

but if you don't feel comfortable, you should not do it

[sendero]

29. You know what..

... rationalize all you want. "Good solid companies" ? Yes, there are. And when the next selloff comes because the Fed quits pumping money into the economy and the ponzi game is coming to a close and the insiders know it and get out and you don't - the "good solid companies" will only drop 25% instead of the 40-50% everything else will drop.

[dmallind]

32. And if you're not a panicking idiot you buy more and wait for the next wave up, getting dividends

You only lose - or gain obviously - when you sell. You buy dividend paying stocks not for the price moves but for the "interest"

None of the shares I mentioned (and probably none mentioned by others) stopped paying dividends in the recent stock slump. All that meant was that you got your quarterly 40c dividend for a share that cost you $22.50 (equals 7.1% "interest&quot instead of a 44c quarterly dividend on the $30.65 today (5.7% "interest&quot .

And of course the smartest thing to do was invest then when all the idiots were panicking. By now you've seen a 30%+ gain if you sell or you're getting nearly 8% annual interest. All every bit as available to me or you as it was/is to the Koch brothers. (personally I'm not quite that smart - bought at $26 something)

The silliness about the stock market being only for the rich is decades out ofdate, from when you had to have a personal broker and buy in 1000-share minimums. Now you can do it yourself for $2 a time.

[sendero]

35. You really..

.... need to look at reality, people who bought in 1999 are still not back.

You can play this rigged game if you want, but the numbers (participation) suggest that most people have figured this game out and don't want to play any more.

With 70% of all trades being made by high frequency algorithms you really think there is a "market"?

No, there is a created reality that can and will change the minute it suits the investment banks to change it. And to think that "don't get out" will save you is ludicrous.

[Katashi_itto]

27. The repercussions of a Corrupt market start to be felt. No outsider invests in a gamed market now.

[DCBob]

30. cash is king.

most investors dont know where to invest anymore. There is high risk everywhere.

[sendero]

36. With its Zero Interest Rate policy..

.. the Fed is trying to force people back into housing and/or stocks, to "blow one more bubble" but it is decidedly not working.

But no worries, they have committed to continuing this insane ripoff of everyman into 2014 so there is still plenty of time to capitulate and get ripped off one last time.

I say one last time because the next time a bubble bursts the aftermath will make these 4 years look like a picnic.

[Evasporque]

33. Wealthy aren't paying any taxes...

No need to sell off securities to pay the tax bill....