In a recent artcile posted over at Money.com, it was reported that Wal-Mart (disclosure – I own Wal-Mart) is teaming up with Sharebuilder to offer brokerage services to its customers. The article talked about how Wal-Mart is looking to sell everything to its huge customer base, just as Sears tried to do once before but failed. I think the article missed a huge issue related to this announcement.
Don’t get me wrong, I believe the more educated people are about investing the better off in the long run they will be. I also believe that having low cost investment options are crucial to investment success. The thing that worries me about this is that the stock market is in some sort of frenzied action right now where everyone and their dog is investing. This is a good time to invest – stocks are rising pretty consistently and the papers are filled with news stories about companies growing profits and share prices rising. It is pretty easy to make money. I also remember the late 90’s when the crap hit the fan and millions of dollars were lost in the markets and people were not ready for it. The fact that even Wal-Mart, a place you go buy cheap clothes and DVDs, is trying to sling stocks is further proof that we may be at that frenzied point again. Of course I have been wrong before…