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| The stock market is not as easy to play as brokers want us to believe. |
I have been buying shares of stock for the past 15 years. I can't seem to find a winner. I own an insurance stock and an oil company stock right now. Neither one of them is worth much.
When I first started investing in the stock market I used my 401(k) plan but that was a terrible time to invest. I lost about half my value before I changed jobs and took what was left from the fund.
Every time I hear someone talk about Warren Buffet making billions of dollars from the stock market I feel like there is a gimmick no one talks about. He spun up his businesses pretty good but most of us don't get rich like that.
A few months ago I thought I would try to be like Warren Buffett. I read this article on Forbes that said all you have to do is sell put options like him. So I tried signing up with an online broker and they wanted money.
I thought the deal was that you sell the option to someone who may buy the stock from you in the future. So why do you have to buy the stock first? I guess you have to prove you're not a crook. But I don't have Warren Buffett's money.
It was only later on that I found this article that says Buffett considers options an investment. Okay, I guess you have to put some money in when you make an investment. But I still don't see why you have to own the stock before you can sell the option to sell it.
There are websites that teach you about options trading but it is really complicated. I understand that a "put" is a sell and a "call" is a buy, but it took me a long time to figure out that you don't deal in options on single shares. You have to buy and sell in blocks of ten shares.
If your options are for $1 shares you only need $10 plus the trading fee but who is going to buy options on a $1 stock? If you want to trade in options for a $100 stock you need $1000 plus the trading fee. Ouch!
And in 2013 the Motley Fool wrote that most people cannot work deals the way Warren Buffett works them. Now that is pretty unfair in my book. If options trading is such a big money-maker for Buffett, why can't it work for the rest of us? And why do so many people hyping up options trading not point this out?
I would love to make money in the stock market but I just haven't figured out how to do it. The old adage comes to mind every time I think about this. It takes money to make money.
