Solo trading may soon pass sex spam on Web
February 27, 2007
By Jennifer Hill
London - Sex drugs, triple-X action and diet pills have long dominated junk e-mail, but stock tips are on the rise.
Stock-related spam now accounts for 15 percent of inbox junk, compared with less than 1 percent two years ago, according to internet security firm Barracuda.
"Pump and dump" scams, whereby spammers buy low-cost stock, then drum up interest to inflate the price, may catch only the most naive of investors. Thankfully so: those who buy into penny stock scams typically lose between 25 percent and 40 percent of the investment's initial value.
But the idea that investors can make better returns by going it alone on the stock market, at the same time as saving on advice fees, has a growing band of champions.
It is a market that did not exist little more than a decade ago, and has been made possible by technological developments and the availability of information. Fifty-seven percent of investors use the internet to help decide what to trade, according to a study by broker TD Waterhouse.
But over and above this new-found freedom, there was another good reason to fly solo on the market, said Alexander Davidson. The dealer turned author said that even in today's rigorous regulatory regime, loopholes remained. "Those who take advice from stockbrokers run the risk that they don't know what they're talking about or are just after commission."
But he warned: "More and more people are going down this route irrespective of knowledge or aptitude. There's no easy way - you're going to have to put some effort into it. But no one cares about your money like you do." - Reuters
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