How Investors Can Fake It Till They Make It
Andy Snyder|June 17, 2020
Something’s gone wrong on the farm.
We came home the other night to a horrendous noise. It was back behind one of the barns.
And if you bear with us for just a second as we tell you of this sordid affair… we’ll reveal what it all has to do with the stock market and a tremendous new way to invest.
But first… peacock sex.
Oh, the sounds.
We’ve heard it before. The farm has had many visitors over the years. It’s as if a band of clowns were playing kazoos while high on helium.
And yet… we marched toward it.
As we shoved our flashlight around the corner, we expected to see quite a stir of feathers and feet.
But alas… there was just one bird back there. And, boy, did he look embarrassed.
This is where the investing angle comes in. But give us one more second for a critical fact.
You see, we’re no biologist, but it’s a fairly well-known fact that peacocks give out quite a, ahem, “copulatory call.”
More delicately, they’re a bit loud in the sack.
But this fella wasn’t in the sack… and he was all by himself. Not a peahen (yes, that’s what they’re called) in sight.
But he’s not dumb.
He’s the biological outcome of the old axiom “Fake it until you make it.” He knows that in the wild kingdom, it’s the fittest that survive. And for peacocks, it’s the pretty too.
And nothing says “I’m pretty enough to mate” like, well, the noises of mating.
This fella, in other words, was looking for a partner by acting like he already had one.
But all he got was us… a middle-aged bald guy with better things to do.
We told him he’d go blind doing that and walked away.
Investing… Fake-It Style
And now, the twist – how this tale ties to the latest way to make money in stocks.
This is good news. It’s an answer to a problem we’ve heard from our readers for years.
The issue is simple. Beginner investors can’t afford shares of expensive stocks. With just a few bucks in their pocket, they can’t afford Wall Street’s darlings and the three- and four-digit price tags hanging on their shares.
Instead of buying something like Amazon for $2,500 per share, new investors tend to buy cheap, high-risk penny stocks for a few bucks each.
It can cause problems.
But now investors have a bit of a “peacock” solution – a “fake it until you make it” solution.
Folks who can’t get the job done, er, the old-fashioned way… can now go about it in smaller numbers.
All it takes, in fact, is just one lonely dollar.
Spice Slice It Up
Several brokerages are now offering fractional shares.
They’re quite simple.
Don’t have $2,500 for Amazon (AMZN)? No problem. Plunk down $25 and get a hundredth of a share.
You still get voting rights, any dividend payouts and the full upside of the stock.
The only difference is the size of your stake.
Interactive Brokers kicked off the trend late last year, and it’s been exploding in popularity ever since. Some small brokers tell us that up to 50% of their trades each day are now for fractional shares.
The idea will reshape the way we invest.
For one thing, it democratizes the realm of investing. Now there is no excuse for somebody to cry that investing is only for the rich. The Wall Street field has been leveled.
Where it once took a full share of Berkshire Hathaway (BRK) – at well over $400K each – to join Warren Buffett’s ride to the moon, anybody can now buy a fraction of a share for just a buck.
Where it once would have cost nearly five grand to get just one share of each of the FAANGs… you can now do it for $5.
Think about what it does for diversification.
Investors can spread their money over many more companies and sectors… and no longer have to decide whether to put their $2,500 bonus check into one share of Amazon or a handful of companies with a lower price tag and higher risk.
They can get fractional shares and a proper portfolio from the start.
It’s a way for new investors to get into the game, make a lot of noise and have some fun before they get the dollars they need for more traditional investing.
Andy Snyder is the founder of Manward Press, the nation’s premier source of unfiltered, unorthodox views on money and what it means for a free society. An American author, investor and serial entrepreneur, Andy cut his teeth at an esteemed financial firm with nearly $100 billion in assets under management. Andy and his ideas have been featured on Fox News, on countless radio stations, and in numerous print and online outlets. He’s been a keynote speaker and panelist at events all over the world, from four-star ballrooms to Senate hearing rooms. Today, Andy’s dissident thoughts on life, liberty and investing can be found in his popular daily newsletter, Manward Financial Digest.