Phantom Shares - An Explanation of Why the Stock You Bought May Not Even Exist...

(Have you watched the Phantom Shares video yet?)

Imagine there are 1,000 of something, it could be anything... let's say "ears of corn." And that's ALL that there are in the whole world - 1,000 ears of corn. For the sake of this example, let's say that no more ears of corn could ever be made. Now, let's say you buy 5 ears of corn.

The very strict, heavily regulated rules for the 'Corn Exchange' say that when you buy ears of corn that they MUST be delivered in no more than 3 days. This is to protect you as the purchaser. They want to make sure there aren't any shenanigans going on, so the delivery has to be made quickly.

So, according to the rules, when you buy your 5 ears of corn, they should arrive at your doorstep in 3 days or less, right? And if you kept buying the ears of corn until you owned 1,000 ears of corn, then you would own ALL the ears of corn so nobody else could buy any unless they bought them from you, correct?

Now if you picked up the financial section of the newspaper, and you owned all 1,000 ears of corn, you probably wouldn't expect to see any "Ear of Corn" transactions, would you? And you REALLY wouldn't expect so see transactions totalling 1,110 ears of corn! Especially after you went and checked your storeroom and counted the ears of corn and saw that they were all there.

And wouldn't you KNOW something is terribly wrong if you saw 43,291 ears of corn trade during the next month... and you owned ALL 1,000 ears of corn? Remember, if you own ALL the ears of corn, there wouldn't be any other ears of corn for people to be buying and selling, would there?

But wait! That's in the real world, using real items. And the stock market doesn't work like that, as you are soon going to find out when you watch this Phantom Shares video.  Just consider that the 'ears of corn' are 'shares of stock.' You'll find out that Billions and Billions of dollars in shares of stock each and every day are traded - shares that DON'T EXIST! Over $6 BILLION DOLLARS PER DAY in shares of stock DON'T GET DELIVERED. And, in fact, some NEVER GET DELIVERED! Does your mutual fund own any of these "Phantom Shares?" It's not something that gets reported... but it's something YOU need to know about!

Watch this Video on Phantom Shares for a 25 minute 'peek behind the curtain' at another way the big boys are making out like bandits and dumping the losses on the investor (Oh yes, they DO get commissions on ALL of the transactions in the 'imaginary' shares they're trading! Why do you think they don't mind it too much?)