What is the best method for overcoming mistrust in investing/trading?
Many people are distrusting of investing. If there was less mistrust and thus more people active in investing it should help everyone out.
I'm thinking maybe showing people the math should help, things like:
Ps = Price sold
Pb = price bought
# = number of shares
A = amount spent
C = commission per a trade
R=Pre-tax profit
Ps/Pb >= A/(A-2C)
# = (A-2C)\ Pb
Ps(#) - Pb(#) - 2C = (Ps/Pb)*( A-2c) - A = R
upper trend line Y2 = MX2 +B
lower trend line Y1 = NX1 + C
middle line Y3 = (Y2+Y1)/2
Approximation = Cos(x)(Y2-Y1)/2 +Y3 + Random or Sin(x)(Y2-Y1)/2 + Y3 + Random
how should that be done? what would be neccassary to get more people active ? etc.
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Not that I would want more people active, but the most simple way to get more people active in anything is to reduce the tax on it. When taxes on investment profits rise, investment declines. Drop the tax to zero and more people and money would go into investing. This is proven over and over again in the market. Mortgage tax breaks,cash for clunkers and the such increase demand for things. Lower the tax rate on investment profits and many more would jump in. |
