Ask Doc Pay attention to what the "smart money" is doing...
These professional traders are market experts. They don't get everything right... But their moves are shaped by experience and analysis. By monitoring these pros, you can figure out what's likely to happen next in the markets.
This isn't a novel idea – we've written about it many times before. But this lesson bears repeating because individual investors like you – the so-called "dumb money" – are the ones these major players are competing against.
The smart money is constantly hunting for ways to gain an edge, and everyday folks make an easy target.
For example, private-equity firms spent billions of dollars to buy thousands of single-family homes with the aim of renting them out as landlords.
Part of the reason Wall Street bigwigs chose this strategy was because they would rather compete with (literal) mom-and-pop homebuyers on real estate deals than the other sharks in their business.
Or take Ken Griffin, the billionaire head of Citadel.
Citadel is a hedge fund, but it doesn't make stock investments. Instead, most of its profits come from its market-maker function... Its algorithms make micro-predictions about prices so it can match, buy, and sell orders and skim off tiny profits from countless transactions.
To do this, Citadel pays brokerage firms such as Robinhood and Schwab north of $2.5 billion per year to get orders from retail brokers. Griffin figures he can squeeze a better price out of the dumb money than if he took every order in the market. He pays so much for that trading flow, your brokerage firm could stop charging you commissions.
These unconventional approaches are just a couple of the many ways Wall Street firms try to make money by beating individual investors.
Now, we don't think about investing that way. We don't need to "beat" anybody. We can make great money in the markets even if someone else is making more than us – and all while focusing on investments that let us sleep well at night.
Still, we do try to find ways to help give average folks every possible advantage. We don't want to leave money on the table unnecessarily.
And we aren't the only ones helping even the score for the dumb money...
My friend Marc Chaikin started on Wall Street as an analyst more than 50 years ago. Most notably, he created proprietary stock indicators that the biggest Wall Street firms and traders still use all over the world to this day. One such indicator is the "Chaikin Money Flow," which has become an industry standard.
This revolutionary metric shows trading activity in the markets. It highlights which stocks and funds the smart money is pouring into... or abandoning.
Previously, Marc's indicators were only available to Wall Street pros who'd pay big bucks to access the data. But after seeing the fallout from the great financial crisis, Marc decided he wanted to help the "little guy" fight back.
So he made his proprietary system available to everyday investors. And using this technology, you can spot the biggest buying and selling sprees on Wall Street as they're occurring. This is particularly relevant right now...
According to Marc, today's historic market is causing a massive rotation of capital among the smart money. If you aren't prepared, you could be blindsided by the moves these insiders are making. So join Marc on Tuesday, October 29 at 10 a.m. Eastern time, as he publicly unveils his newest breakthrough.
Let's dig into the Q&A... As always, keep sending your comments, questions, and topic suggestions to [email protected]. My team and I really do read every e-mail.
Q: Thanks to your warnings on melatonin, I'm trying to keep to a sleep schedule on my own, but finding it rough. What would you advise? – H.Y.
A: Thanks for your question, H.Y., and congrats on stopping your melatonin use. You're going the much healthier route by trying to develop good sleep habits.
While there are lots of ways you can try to improve your sleep, here are three tips that support your body's natural sleep/wake hormones:
- Let the sunshine hit you in the morning. Open the curtains and allow the bright, natural light to hit your eyes as soon as you wake up. If it's still dark when you wake up, turn on the lights in your bedroom. And if you're indoors as the morning continues, gradually make the light around you brighter to mimic the rising sun.
- Turn the lights down in the evening. Dim the lights in the evening and turn off your electronic devices at least one hour before getting ready for bed.
- Eat earlier in the day. Don't eat anything within three hours of going to bed. This lets your body rest instead of having to digest food.
These are some simple things you can start doing right away that can make a big difference. Best of luck as you establish your new sleep schedule.
Q: Hi Doc… A little secret for coffee stains on the teeth from a dentist who loves coffee: mix baking soda and hydrogen peroxide to a slurry and rub it on your teeth with your finger being careful not to rub too much on your gum tissue (it can temporarily irritate the gum tissue). It works great for the more superficial stains! – L.N.
A: This is a great tip for all the coffee drinkers out there. Thanks for sharing, L.N.
Several years ago, I started using a mixture of baking soda and salt in place of mouthwash and toothpaste (about two parts water to one part baking soda for mouthwash or equal parts for toothpaste). The high pH in baking soda helps kill bacteria and strengthen tooth enamel.
What We're Reading...
- Did you miss it? Central banks are rushing to our rescue.
- Something different: Washington College leaves its cursive logo behind because it's "too hard to read."
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
October 25, 2024