Lets talk about how people have traditionally bought stocks and gold/silver and other commodities.
Up until the last 5 or 10 years when online banking and online investing has become so popular, people would find a broker and buy stocks usually in person or by telephone.
Just check out some of the Hollywood movies if you don’t have direct experience with the market.adu
Movies that show the underbelly of the business (thats only Hollywood’s version of it so maybe its not like that)…Wallstreet, 9 1/2 weeks, the Firm (off shore accounts and crooked lawyers) etc
In the old days your broker knew all about how much money you had and probably how many litters your dog had.
This was all part of the game the KYC or know you client and make sure they aren’t in the money laundering (illegal washing of crooked money by buying legitimate business etc).
You would decide on your level of risk tolerance and would be either a conservative low risk client who bought blue chip stocks.
These were the stocks like IBM, Xerox that paid dividends every year and gradually went up.
During the computer boom years Microsoft and Apple came along and were considered risky so not everyone jumped on the band wagon.
But those who did retired in the Caymans 20 years ago and sleep on bags filled with $1,000 bills.
Back then the risk takers who often made fortunes or shot themselves bought risky investments using whats called “leverage”.
The movie 91/2 weeks with Mickey Rourke was about a high stakes arbitrager trader who made fortunes and lived hard and had sex probably 10 times a day and…seemed to like fruit. Can’t say I blame him.
But leverage or arbitrage is basically gambling.
In the case of leverage that means spending money you don’t have in hopes that if you win you will clean up…and if you lose, well you better leave town at night and never come back.
People were into currency trading and futures and eventually in the late 1990s computer people thought they could do quick flips with their low discount trading commissions and became day traders.
Day traders are like the kids (teenagers) of today who are buying goofy NFT digital characters for $500 and cashing out a week later with $20,000.
Eventually, they will miscalclate their odds and wind up begging mom and dad to cover their loss because their school mate has threatened to break both of their legs since they promised him a big commission on the $20,000 he loaned them.