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The simple answer to the title questions is: or course they are. While some forms of market manipulatlon are Illegal, people will try them anyway. It isn’t just the big kahunas who try to drive share prices. Anyone who posts a “sure thing” on a chat board, knowing the underlylng stock is worthless, is trying to manipulate the market. Many investors never dip a toe in the stock market pool, except perhaps for a company 401k. Their reason is that the stock market is stacked against the little person. Big investors, using sophisticated computer programs and manipulating share prices, make it impossible to win, they say. This there is some truth In the first part of that sentence, but it does conceal another point: finding good stocks is a lot of work. A lot of Investors secretly want to convince themselves that they're not missing anything by not participating in the market because the prospect of leaming about it is too intimidating. Even after that work is done, investing requires a cool head and sometimes a strong stomach. What is faulty is not the idea that markets are manipulated, but the conclusion that investors draw from that infonnation. They fail to perceive that market manipulation can work in their favor as often as it works against them. When it’s all said and done the underlying value of sound companies remains. Individual investors are at an enormous disadvantage in very short term trades. It is undeniable that your ability to move huge numbers of shares is nonexistent, and your computer programs can’t compete with theirs. But over a longer span of time, individual investors start to pull even and often pull ahead. One of the reasons is that Individual investors are accountable to no one but themselves. Hedge fund managers, mutual fund managers, an institutional investors are under constant pressure to produce results This means selling good companies and buying bad ones, lust to attempt to get that temporary bump that will make their numbers look good this quarter. Here’s how you can avoid letting a manipulated market from taking you down: 1) Make sure you trust your advisers. Whether you hire a full time investment manager or iust read the financial blogs once and a while, make sure the person giving the advice has a track record you trust and is acting in your interests 2) Watch for accounting tricks. Eamings numbers can be manipulated rather easily. Watch for footnotes that tell a different story than the main text and red flags in the cash flow statements. 3) Think long term. Manipulations come out in the wash. A share price may be driven by manipulation in the short term, but fundamentals drive value in the long. 4) When manipulation acts in your favor, unload some shares. When a great deal of suspicious buying drives up the price of a stock to levels that seem unsupportable, think about taking the money and running if you’re not sure what's going on, try selling part of your stake and hanging on to the rest. 5) Think twice about following momentum strategies, and cast a skeptical visit: Stock Market Investment Tips
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