Mr. Smith purchases stocks and bonds because he has been encouraged to believe that he can get rich through investing.
"The investor," says Richard Ney, "is like a chicken unaware he is about to become a broiler.""Decade after decade, he continues to attribute his losses either to unpredictable economic circumstances or to his own incompetence. Yet in reality the investor's losses are caused by the infinitely elaborated controls exerted over the investment process by the big-money insiders of the Stock Exchange. The scandal of the age is that mass education turns investors into puppets, the media fasten the strings, and the Exchange then hangs them." 1 In referring to Wall Street, I include the various U.S. and foreign stock exchanges, the banking establishment, the major investment houses, and the regulatory agencies which ensure the Con Game is played by the Insider's rules.
A person who "plays" the Wall Street game should be aware that it is precisely the same as playing in a Las Vegas casino - the game is stacked in favor of the people who control the system.
Since the utter collapse of Wall Street in 2008 and the contorting of capitalism into fascism, some uninformed--or unintelligent--persons have been peddling the lie that capitalism was a benign economic system that suddenly developed rogue tendencies. Ellen Brown's article, "How Brokers Became Bookies: the Insidious transformlation of Markets into Casinos," is typical of this kind of misinformation and falsification.
As this present series of essays proves, Wall Street has, from its inception, constituted a fixed gambling casino, with the tables set squarely against the hapless marks (investors). To say that there has been a recent "shift from investing to gambling," is utterly false. Capitalist "investment" has always been a swindle. It's not as though a perfectly benign and benevolent capitalist Wall Street investment system suddenly became corrupt and lethal--it's always been that way!
Some investors erroneously believe that they can make a "killing" by investing in "growth stocks," stocks of new companies with unproven track records. Pumped full of phantasies of windfall profits, these uninformed investors reject those stockbrokers who recommend sticking with the Dow stocks (of 30 leading companies with proven track records). Such heedless investors almost force stockbrokers to play the con game of "I've got a really hot new stock that can't lose."
Investors are manipulated to believe that they can "read the crucial indicators" - such elements as the rise or fall in inflation rates, raising and lowering of interest rates, wholesale price index fluctuations, and whether or not the head of the Federal Reserve Bank sneezed during the last twenty-four hours.
As is made clear in this presentation, the "reasons" given for the rise and fall in the Dow Jones each day is part of the Con Game, intended to make the uninformed investor believe that the stock market really isn't rigged, but reacts to "natural" causes.
1 Richard Ney. (1975). Making It in the Market, NY:McGraw-Hill