Will the PPT Go MIA Again?

As the summer officially begins – and based on recent market action – the big question we have is; will the PPT go MIA again?

Let’s back up a second.

If you’re not aware, the PPT stands for the Plunge Protection Team.

It was created by the Reagan administration after the crash of 1987 to prevent another market crash.

They’re institutional boyz whose main purpose is to buy like crazy when the markets are crashing.

(Read more about the PPT and more Annoying Acronyms HERE).

So, when you see wild swings in the market, you can bet the PPT is hard at work.

Why the PPT Won’t Go MIA

They operate as HFT’s (High Frequency Traders) and use highly sophisticated Algorithms that trade faster than you can blink your eye.

Example:  The HFTs can trade 2,000,000 shares of a stock in a Nanosecond, in-and-out.

IF they only make $0.01 cents (ONE PENNY) on the trade they clear $20,000.  If they make $0.10 cents (A Dime) they clear $200,000.

Not bad for ONE TRADE.

Do this numerous times during the day and you’re talking some serious money.

But the key driver for the PPT getting involved is based on one word.

FEAR.

Why fear?

It’s simple.  The markets tend to fall a lot faster than they go up.

Think of gravity.

It takes more force to throw a ball up in the air than it does for the ball to fall down.

The most recent example is how in February 2020 we saw the greatest economic global collapse since the Great Depression.

And it was followed by the fastest economic recovery in American history.

Question:  Do you think mom and pop was the driving force behind last year’s market surge up?

Unfortunately, mom and pop ended up losing with the 99% who sold into the fear.

At the same time, the 1% made fortunes at their expense.

Here’s the point.

The cycle is about to repeat itself.

And when markets get scared, you’ll wonder if the PPT will go MIA.

They won’t.

But they’ll expect you to run in fear.

Don’t be their victim.

Instead, learn how to prosper AND thrive in Turbulent Times by reading our “…In Plain English” newsletter (HERE).

Tighten your seatbelt.

This summer’s going to be wild.

Feel free to share this with a friend.

And tell them:  We’re Not Just About Finance.

https://www.financialsmatter.com/do-you-make-these-mistakes-when-investing/

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