In 2021, the best way to make money is to learn to think and act like a retail investor, or, get out of the way. But as earnings season gets into full swing, it’s worth remembering that retail investors come in more than one vintage.

Sure, the YOLO (you only live once) army are rampaging through the market bidding up semi-worthless companies and blowing up the shorters in the process.

But there’s an equally dominant force: the grey army of franking credit warriors. Their goal is simply to earn enough income to compensate for the fact that they’re not getting anything from their bank accounts.

That makes them vulnerable​ to a variety of yield scams, which they are falling for with worrying ease.

In the sharemarket, they’re being lured to large and well known companies that are prepared to distribute the majority of their profits.

Those high yielders can often be accidents waiting to happen too. Cash flow problems can simultaneously force dividend cuts and violent de-ratings, leading to a loss of both income and capital.

Read the full story at afr.com.