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Sound Advice: December 3, 2025

Why should investors ignore commercials about trading?

Investors should largely ignore commercials about trading because these advertisements often exaggerate potential benefits, downplay risks, and promote strategies that are most unlikely to align with an individual’s financial goals or risk tolerance.

Misleading Promises and Exaggerated Returns

Many trading commercials emphasize quick profits or "secret" strategies, often using testimonials or simulated results that do not represent the average real-world experience. Such claims often encourage unrealistic expectations and impulsive decisions, which can lead to significant financial losses.

Commercials typically neglect to fully explain the risks involved in trading, such as market volatility, leverage dangers, and the risk of losing a substantial portion of invested capital. They may also skip over hidden costs like commissions, spreads, and platform fees, which can eat into potential profits.

Misalignment with Long-Term Investing Principles

Most individual investors benefit from long-term strategies like diversified portfolios and steady contributions rather than frequent trading. Commercials often promote short-term trading, which can be time-consuming, stressful, and unsuited to those seeking financial stability and growth over time.

Regulatory Concerns and Scams

Some commercials are linked to unregulated brokers, trading schemes or products that may be scams or offer poor consumer protection. Investors should exercise caution and conduct thorough research before signing up for any trading service promoted on television or online.

So who is making money trading?

The only short-term traders who make money are institutional investors who buy and sell in huge amounts.  They make their money by taking advantage of what’s known as the spread.  Typically, stock and bond prices are quoted as a spread.  An example of a spread would be 54.40-54.42.  That means they will pay 54.40 if you are selling and will sell to you at 54.42.  The tiny difference, magnified by the size of the transaction, is their profit.  That’s dramatically different from what individuals would fantasize from their own versions of trading.

Recommendations

  • Rely on evidence-based strategies and credible sources including regulated financial professionals, academic research, and reputable investment platforms.
  • Focus on personal education about markets, portfolio diversification, and aligning investments with financial goals.
  • Be skeptical of any commercial promising guaranteed returns or quick profits.

By ignoring trading commercials and seeking reliable information, investors can reduce their risk and increase their chances of long-term financial success.

N. Russell Wayne

Weston, CT  06883

203-895-8877

www.soundasset.blogspot.com

 

 

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