definitely a lot truth to that, but it is surmountable in many ways. some people have advantages, but there are too many factors influencing the market (e.g. the performance of the companies being traded, the macro economic picture, etc.) for anybody to have a strangehold over it. i think that the disparity in quick access to information or quick trade execution is mostly relevant for short-term traders, particularly day-traders. if you're going to hold a stock for a few days or more, then wringing every last penny out of the transaction doesn't matter as much. buy a company that pays a solid dividend, provided your research suggests it will be sustainable (or better yet, increase regularly over time).
none of the rigging/deck-stacking of the stock market really impacts me income-wise, for two reasons:
1) i don't daytrade. only investing like $150-$350 at a time, the $7 broker fee would outweigh any fractional-percentage gain i might have in one day.
2) i do so much stupid shit, that other market participants can't hold me back nearly as much as myself, unless they steal my computer or literally stand on me and pin me down so i can't type.
to elaborate on the stupid stuff in #2: starting in late 2008, i bought Vanguard Index Fund ETFs alongside my stocks. an index fund is designed to capture the movement of larger chunks of the market.
i didn't bother researching how to buy them directly from Vanguard (who has their own brokerage), because i was using Scottrade for my stock investing, and felt like keeping all my activity on one website. Scottrade charges $7 per trade. well, a handful of months back, i actually investigated on Vanguard's site, and they charge you $0 to buy and sell their ETFs. understandable, given they already get a small management fee on the ETFs, regardless of what brokerage you buy them through. i did the math, and i could have saved $595 in transaction fees over the past 3.5 years by using Vanguard to trade the ETFs. and since they went up in price during that time, you also need to include the returns i could have earned on that $595, which amounts to at least another $60.
so essentially, i pissed away around $655, out of laziness and not wanting to have another browser window open... even though i have multiple windows open all the time for other reasons. (why, Ctrl+N is second only to Ctrl+F in terms of key combo greatness.)
another mistake i've made is purchasing stocks or ETFs in too small of quantities, like $200 (and sometimes even $150). now, it costs $7 to buy and $7 to sell a security with Scottrade, totaling $14. meaning ~7% of that purchase is squandered on fees. to wind up with a 10% net gain on such a purchase, i'd need a gross gain of 17.35% from the stock/ETF -- that's nearly 75% more. outperforming by that wide of a margin is damned difficult to accomplish consistently, and people who can do so are pretty elite (read: beyond my skills). i'd be better off consolidating two or three of those purchases into a single larger purchase of an ETF (like SPY). it can have a smaller gross gain, but i'll still come out ahead.
now, if i'm spending $150-$200 on a stock that shoots up a good ~30% or more (generally a speculative stock, but some established large caps have gone up a lot too), the fees matter less. they also mattered less during periods of time when the market as a whole went up a lot (e.g. early 2009 - early 2011). if you see my posts from Spring 2011, i was able to slightly outperform the market from the bottom up until that point. however, as the market's ascent has slowed, my fees eat a larger percentage of gross gains, and i've actually trailed the market for the past year. sure, some of this is from bad stockpicking, but that's less of an issue than buying and selling in too-small increments has been. one way to mitigate the fee issues is to hold for a longer time after buying, but that could blow up in my face if the market tanks again.
thirdly, i STILL have yet to move any of my brokerage cash back into a higher interest bank account. :/ so i've missed out on money there, too. yes, this is turning into a running gag of sorts.
