February 19, 2015
Investing is simple (not necessarily easy) when you learn ___________________________________ .
Investing is simple (not necessarily easy) when you learn ___________________________________ .
Investing is easy when you learn what to invest in. You should invest in something that actively makes you money when you own it, such as index funds. You should avoid commodities because you don’t make money with them until you actually sell them. You should never invest in life insurance products or invest in something that is actively managed. You should never buy individual stocks or try to time the market. The key to investing is patience.
There are some very simple steps when it comes to investing that people can take to get the best return after costs. You buy no load index funds at Vanguard and hold them for a very long time. Having an asset allocation that is best for you. The reason that it is not easy is due to all the emotions that get mixed in with investing. Many people let their emotions control there investing and that makes it hard for them to leave there investments alone. If you see an investment going up, that is not the time to buy it even if everyone else is buying it and saying its the time to buy. If you see your investments fall hard, do not freak out and sell, that is the time to be buying that investment not selling it. You need to avoid listening to all these people with fancy letters after their names who say they know best about your money. They are just out to make money off of you, not for you. You need to separate yourself from your investments and not let your emotions dictate how you act.
Investing can be very simple once you learn how to interpret all of stuff the financial world is throwing at you on a day to day basis. There are a lot of options out there to invest in and I think that a lot of people are overwhelmed by them and all of the fine print that they come with. But, becoming financially literate can help you to simplify those choices and actually understand what each investment can offer you. This will lead you to be able to understand what you are investing in and why it might be a good or bad investment for you.
Great answers. Let’s recap.
Investing is simple when you see what others don’t want you to see. You see through the illusion of “experts” and their suits and credentials. You understand how this game is played and you play it on your terms, not theirs. You eliminate almost all costs and get rid of the middle man as you diversify all over the world in stocks and bonds while ignoring the daily gyrations of the markets and the fools in the media. You stay rational in an irrational world. You become the wise and successful investor!