Hi and welcome to part four of four of Three Little Securities. In this part, Stock Security shows Bond and Option how simplicity they can beat inflation. Here we go.
Now when Option and Bond arrived in Stocks town they were surprised by the simplicity of his economy. Stock explained that when a company wanted to raise money it will have shares of itself to the open market. If you bought yours and the company did well, you shared in the profits when the price of your shares went up and vice versa.
Stock explained, “Although you can borrow money to buy stocks the average person buys stock with money that they already have and that they worked for.” Stock sad that many people in town have been frightened by the goings on in Bond and Options town that they even afraid to spend money that cause the price of many of the company shares to fall since business was hurting their earnings, but Stock explained that there where certain companies in town that their times as bad as this one and still survived.
Companies that he called blue chips. “Blue chips?” asked Bond. “Yes, because if I were a poker games.” Stock Security explain “I want to be holding blue chips at the end of the game because they have the highest value.” Option asked, “You play poker I don’t know, well.” Stock rolled his eyes “Stay with me. These companies have been giving the best returns over the long term.”
Option looked and huffed. “This is fine and there is the stock, but very unsexy.” Stock laughed, “Is it because on average it takes time for a stock price to go up so that you can sell it for a significant profit and make money?” Stock feared into his brothers eyes or maybe it’s because it’s too straightforward and perhaps too easy for everyday folks to understand and become a part of two because what’s the point of having a VIP party if mom and pop have a ticket in two.
Option dropped his head and then hugged his brother and said, “Let’s get some pork rice brow so that your economy simple my economy is very complicated, but I still love you man.” The three brothers set and Stocks modest home working on plans for their futures when they heard a knock at their door. “Who is it?” yields Stock. “Little securities, little securities let me in.” Stock motioned to Bond and Option to keep quite. Inflation thrummed “Listen you little tweet.” he said “I know you’re in there. My intelligence reports are not wrong, so open up or I’m coming in after you.” But stocks stood strong. He know that overtime his time could wage a strong war over inflation.
There will be times when the prices in his economy were down, but the quality companies that have been there for the long term such as the blue chips survived. Over the long term they’ve offered the best defense against inflation. Stock kept his market simple. He had no reason to panic.
“We’re not letting you in not by the hairs of our—they exclaimed. Inflation quite it down. The brothers thought they were safe until they heard Inflations closed on the chimney. “We’ve got to kill Inflation now.” said Stock. Stock remembered that he bought a cheap cauldron of oil from the gas station the day before.
Stock pushed the cauldron into the fireplace. Inflation, seeing the cheap cauldron of oil below him, tried to escape back up the chimney, but it was too late. He slipped into the chip oil and immediately depleted. Chip oil I’m depleting gasp. Stock, Bond and Option breathe a sigh relief as they watch Inflation depletes.
“Look like we’ve got a bit of depletion on her hands smart option. Now prices will go down instead of up. But Bond the security side. “Although that’s not a good thing either because companies will earn less from their sales if they have to lower the prices which may mean down sizing which may mean people losing their jobs.” Stock replied, “So maybe Inflation wasn’t so evil threat after all. We need to replace him with another threat in our markets then. Option paused, “Well if we need another threat in our markets, how about that investment banker does?”
They all smiled and hug and decided to work together to provide simple, diversified choices for their investors. If the investor wanted a long term investment that grows overtime, Stock had a solution plus the couple of short terms solutions too. If the investor wanted steady income from their investment, Bond had a solution and if the investor wanted to profit from price movements whether the price went up or down Option had a solution plus a few others off to slip.
And then they all lived happily ever after and that’s the end. Please come back there’s going to be more stories in the pipe line, but I hope you enjoyed this series. Have a great one and I will see you soon. Thanks for coming by.
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