A lot of investment firms and day traders make their money (or try to anyway) by short selling stocks.
To short sell a stock, a trader will borrow it, sell it, then buy it back later hoping it has gone down in price since the sale. They profit the margin between their sale and purchase.
It’s effectively the opposite of what many investors look to do, which is purchase a stock at a lower price and hope it goes up before they sell it.
So why would anybody do this in reverse and why are we okay with it?
It is obviously legal. That is not the point. The only question is why is this so socially acceptable and why is it not talked about more.
These days, various elements of peoples’ lives and the “system”, however you define it, come under various forms of shame when they do not promote the overall wellbeing of society.
So how has short selling slipped through that grasp?
Perhaps the answer is simple.
People do not understand it.
Perhaps it also reflects a lack of knowledge of the stock market and investing, which is a sign of another issue, lack of financial literacy which leads to wealth disparities.
That’s another article though.
So today I am here to say we should celebrate the investors. The people who invest in companies, hoping to see them grow and create value.
Value that is created which turns into prosperity for those who run the company. Jobs for those who can then work at the company, which turns into their prosperity. Wealth that is then spent in the community which turns into local business owner’s prosperity. Jobs in the community which turns into the workers’ prosperity.
This is why I invest in primarily American companies. It is not because I do not want to see people in other nations do well.
It is because I want to first and foremost increase the prosperity of my home community before I can think about increasing the prosperity of another. You cannot consider such things if you are not operating from a position of strength.
I want my country and community strong and prosperous.
Short sellers are not consumed by such thoughts, though.
Good investing in your own community can result in increasing the wealth of you and your neighbors.
Short selling, on the other hand, is a bet that the companies run by those in your community and staffed by those in your community, will fail. The short seller holds a hope in his/her heart that someone else’s misfortune will lead directly to their own fortune.
Should a working family lose their income is of no matter to them. Not when it boosts their bottom line, of course.
The good investor, conversely, holds a hope in his/her heart that everyone’s fortunes will rise together. Working families getting jobs and promotions boosts their bottom lines.
Investing is a mindset.
Which mindset should we aim for?
If you enjoyed this content today and want to learn more about investing for your financial future, maybe you don’t want to ask me as I am not a financial advisory nor fiduciary.
Here are some resources you can go to, which I personally love:
*As always, this article is not meant to give financial advice. Past results are not a guarantee of future returns. Everyone must do their own due diligence and determine the money managing and wealth building strategies that work best for them. Information provided here is meant to provoke thoughts, not provide recommendations. This is not personal legal or investment advice and may not be appropriate for all readers. If personal advice is needed, readers should seek the services of a qualified legal, investment or tax professional.
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