The funds simply do not like the volatility as that decreases their returns. Still can't figure out how daytrading is easier in a bull market. You can go short or long depending on the trend and still close the positions at the end of the day. Also still can't figure out how all the day traders are going to suddenly be wiped out when the bull market ends, like the market is going to end all of a sudden in the middle of the day, LOL. The funds depend on increasing assets to make their management fees. What the funds are really afraid of is not the day traders losing money, but all of their clients bailing out of mutual funds after day traders have stopped supporting the stocks in their portfolios. The music ends when the day traders leave particular stocks. You see this all the time already, but its not the daytraders who are losing money, its the people that hold overnite that get stuck holding the bag each time. Its the mutual fund owners and institution investors that get stuck without chairs when the music stops.
"They are novices," Liu said. "When there is a bull market, yes, they can make money. But once the music has stopped, day traders will disappear. They will lose so much money, I tell you."--Like daytraders will continue to go long on stocks that are going down or are flat or lack volatility or volume. Give me a break.
Day traders also tend to buy some of the riskiest companies, such as Internet stocks, because their prices swing the most. But many managers worry about the inevitable "burst" of the so-called Internet bubble.--Yes, many managers worry about the "burst" of the Internet Bubble and you know why, because they are the ones secretly investing in this sector, holding huge positions overnite; they are the ones taking much higher risks especially as measured by volatility, and most importantly they worry about it because they know the daytraders can bail very quickly and stick them with the stock and huge losses. Seems to me if the funds are so worried about it, maybe they shouldn't be investing in these types of companies. But wait they can't do that because they have to keep up with their neighbors mutual fund returns who do invest in these companies. Yes, the funds are going to be left holding the bag. No doubt. The funds want everybody to be long term money and not trade to boost the funds own returns at a lower level of risk. Dream on. |
