Topic: How To Invest

What is Pat’s commentary for the week of September 17, 2019

Article Excerpt

One key part of our Successful Investor approach is our “Limelight Rule”: Downplay or avoid stocks in the broker-media limelight. This is a basic portfolio-construction principle. Heightened attention from brokers and the media is a poor guide to investment profits. In pursuing their own interests, brokers and the media both tend to zero in on fast-rising stocks that have an appealing story and the potential for huge gains. The brokers want to attract short-term stock traders who spend a lot of money on brokerage commissions. They also want to build warm relationships with companies that attract short-term traders. These companies tend to have ambitious growth plans, which means they are likely to want to sell new stock and bond offerings to investors, a source of even greater broker profit than trading. The media want to attract readers and viewers, who can help sell advertising and subscriptions. This gets harder all the time, as growing online media competition drives down advertising rates and subscription…

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