Why the Stock Market Is Not the Answer; The Answer Is... (Part 1 of 3)

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Like millions of others you are probably wondering where you can attain the greatest and safest return on your money in the shortest period of time. Finding the right investment vehicle can be very difficult to say the least. The stock market can give you stable long term appreciation potential if you diversity and hold for a number years. Sadly, however one downturn in the market and years of gains can be wiped out overnight. Unfortunately, most Americans will stop looking for other ways to higher yields. They will leave their money in stock market and must continually hope that when they are able to retire the market will stay strong and not suffer a downturn. In addition, when they are enjoying their retirement many will have the added burden of having to constantly watch the market to make sure their nest egg stays intact.

In my work as a financial consultant and in my study of Finance I formed the opinion that that the greatest obstacle to attaining wealth through the stock market is the efficient market hypothesis (EMH). This controversial theory is usually only discussed in academic circles but it affects each of us everyday. EMH states that it is impossible to beat the market because prices already incorporate and reflect all relevant information. Proponents of this theory state that it is pointless to search for undervalued stocks or try to predict trends in the market because the market (i.e., buyers) already take into account risk and growth factors, economic trends, and future income when stocks are traded. While I don’t completely agree with the theory it does present one of the unseen hurdles, when trying increase the value of a stock portfolio.

The end result is that we have millions and millions of investors with the incorrect notion that they can beat the market and find a way to financial freedom. This is a very difficult task especially in the short term. What if there was a way to earn a guaranteed 10% to 50% per year on your investment? What if there was a way to purchase a high yield investment instrument which helped the community and put your dollars to good use? What if the investment vehicle was created and backed by state law and designed to protect the investor? What if the investment vehicle allowed you sleep easy at night because at worst you would get clear title to valuable real estate acting as the security of your investment? Watch for an upcoming article to explain more...


  • Nancy30th October, 2002

    Hello Darius.

    Are you talking about Tax Lien Certificates? I have read a lot about this way of investing and am very interested in finding more answers. Please let me know if this is what you are referring to or if you have knowledge and/or information on tax lien certificates.

    Waiting your reply!

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