Pump and dump…

According to Wikipedia, “”Pump and dump” is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money.” I like to apply this to the entire stock market. I know I always get a ton of flack from all the personal finance gurus out there but hey it’s just my humble opinion. Whenever I see advice to invest your money, for retirement, education, or whatever, I think of a broad-based pump and dump scheme that encompasses the entire market. My conspiracy theory is that the baby boomers will yank all their money out leaving the next generation with an empty retirement fund. Funny if that did happen. So keep piling all your money into the market, just hope the next generation will do the same for you.

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2 thoughts on “Pump and dump…

  1. As an unwillingly retired baby boomer, I can assure you that no one is going to yank all their money out of the stock market in one swell foop. If they do, they’re fools. Not many of us fit that category.

    I struggle to scrape by on Social Security and whatever dumpy little side jobs I can get, BECAUSE it’s painfully obvious that I will need my savings to support me in my extreme old age, when there will be no one to care for me but hired help. And I pray every day not to live into dotage, a) so that I don’t have to go through that horror and b) so that my son can inherit as much of my assets as possible. To the extent that I take a drawdown for survival’s sake, it’s interest and dividends. My principal is still building capital and will until the government forces me to withdraw a specific amount, at age 71 1/2. And I imagine that’s probably true of most boomers who have their savings in the market.

    • Thanks for your perspective! I can see where you are coming from in regards to making your retirement funds last longer. However, my counterpoint would be that in order to reallocate to more conservative investments you have to still yank your money from stocks to bonds. Another counterpoint is your heirs, along with other boomer’s heirs, might yank that cash out regardless. Might want to set up a trust.

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