Investing your money
Recent events on global economic scene made it harder for individuals to invest. Furthermore, nowadays, investments are regarded as fairly hazardous. Most western countries have experienced various economic problems, whether we are talking about public or private finances. Simply put, environment is not suitable for big risks. However, even though all indicators show that we shouldn’t invest, logic dictates that this is improper way of observing things. As it usually goes in economy, best moment for purchasing financial instruments is when no one else wants to. In fact, the most successful investors throughout the history were those that were going against the market.
Even though laymen do not realize this, investing on financial market doesn’t mean that you are competing against the system. Quite the opposite; it means that you are competing against the other players. Naturally, economy has something to do with. For example, if nobody has money at hand, it makes market less flexible meaning that there will be less fluctuation (at least in theory). Nevertheless, those that are going against the grain are precisely the ones that are constantly able to make extra profit. General market practice is to make portfolio of stocks and bonds and to make profit similar to market average. Those that are knowledgeable are able to “beat the market” and make higher returns than average investor.
Best example of this state of mind is rise of the commodity markets. Although stocks and bonds plummeted, people suddenly started purchasing stuff such as gold and platinum. This confirms us that there is always something to invest in. AAA Gold Exchange review shows us that this company believes that prices will only go up in the future. Have in mind that only a handful of people made good money during this transition. Those that predicted fluctuation of the market and the fact that commodities will become hot, made enormous profit in short amount of time.
In order to beat the market, individual needs to predict how the market will change. Professors of economy would suggest using different formulas in order to determine this. But, in practice, reading the news is the best way of predicting and adapting to changes. Have in mind that most investors react when the situation is over. If you are constantly keeping track of events, you are able to anticipate what will happen next. This is often connected to politics and macroeconomics.
There is another, golden rule that future investor needs to adhere to. If something is too good to be true, it usually is so. Even though you need to listen to news in order to keep in touch, it is important to determine what news is good and which ones send us the wrong signal. It is easy to get swayed by the mentality of the masses. But, as an investor, it is of utmost importance to go against it. Sometimes, it is better to go after your instincts instead of your mind. Although this is a paradox, it is will lead you to bigger profit.
10 Comments
juli guthrie
Thank you for the insight! INvesting is important for our future, but so uncertain these days!
Pamela Gurganus
This is a very interesting read and I appreciate you posting this. I always think about investing, but don’t really know much about it. Thank you for sharing this information and for giving me some insight.
Nikolina
I don’t have much confidence in that whole stocks and bonds thing…
Jennifer Boehme
I would not do this. I would have the luck of loosing it all. But we do need to think of the future and watch our money.
Sarah L
I invest in Money Market shares. This distributes the funds to several companies and spreads the risk to you.
Tamra Phelps
I admit the thought of understanding investing scares me. I feel clueless. If I had money to invest, I would choose things I actually know something about.
KATE SARSFIELD
I wish I had the money to start investing! As it is I barely have enough to get from week to week with just a little going into the pot against big bills like my car insurance or that dreaded ‘rainy day’. Back when I was earning (I’m now registered disabled & just get an allowance from the Irish Govt.) I was careful with my money & did buy some nice pieces of jewellery that will be worth something to someone in the future. My niece can either keep them or sell them to get a deposit on an apartment and in the meantime I get to wear them – win/win!
Kelly O
I am needing to start investing. I don’t know anything about it, and so I am intimidated to start. I, fortunatly, have a friend that is very involved in finaning/investment banking. I should make an appointment to talk with him. Thanks for the nudge.
Tamra Phelps
This is good advice. we all need to educate ourselves before we invest. I know I feel clueless with investments!
Rosie
A while ago, someone starting leaving magazines like Kiplinger’s, etc. for the next person, so I started to read them. I was amazed at how much you can learn about all kinds of investing from reading magazines like this. I normally just like to read recipe magazines and the like, but now I’m reading these investing magazines they are good for the general population, not geared to the expert. I would suggest giving a subscription to a magazine like this to anyone in their early 20s on up, another is Money magazine. They are much more interesting than I thought they would be. Ppl shouldn’t just make a decision on a “stock tip” kind of thing.