Stock Investing: Knowing How to Make Hay and Ride the Tide
An Acceler8now.com Investing Education Resource July, 2007
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| Past performance is no guarantee of future results. A risk of loss is involved when you invest in stocks. Views expressed in this article and elsewhere on this website are not a specific recommendation to you. Always consult your financial adviser. |
Investing is a great way to build wealth and enjoy a stable financial status. While other areas of investing - bonds, property, managed funds, treasury securities, etc - are important, stock investing is easily the most prominent (even glamorous) investment platform. Across the world, investing in stocks and trading in staocks have attracted a huge followership, a pointer to the wide acceptance of this vehicle for wealth-creation. Buying and selling stocks is a full business engagement for many. These are mainly the stock traders, often stockbrokers and fund managers. For many more, investing in stocks may not be a fulltime engagement, but it respresents an important element of their stratey for financial security and retirement planning.
Okay, let's leave the 'hype' and get down to the basics. Question: does stock investing really work? Is it possible to build financial security by investing in stocks? From years of global experience, the straight answer is yes. Stocks can be an important part of your investment portfolio and substantially help you to build wealth.
Over the long-term, most stock investors emerge much more successful than they started, but that doesn't rule out losses, especially in the short-term. Volatility is the hallmark of the stockmarket and in the short-term, this could produce a shocking devaluation of one's investment. Investors get to learn the market though. More importantly, they learn the tools and techniques that aid the quest for success. If you take time understand the market and its tools, chances are high that you achieve excellent results. The dominant majority of investors end up that way: successful, much richer and happy with their choice to invest.
Some view the stock market as exciting, possibly because of its unlimited potential to turn out outstanding returns. Others rather focus on the volatility that characterises the market. No doubt that while the first group sees opportunities in the belly of those price swings, the other sees danger. Invariably, the former acts to take those opportunities, riding what is clearly like tidal waves that ebb and flow: those who understand the waves know when to jump in and have fun. Those who only sense danger about the market will likelly stay off or fail to explore it with vigour. They stay safe - if there is anything on earth that really offers that - but that is how they miss those bull runs that bring out the thrill of the stock market.
Anyway, never get the impression that those who invest in the stock market are plain dare-devils. Nobody ever wants to throw hard-earned money away. The stock market continues to bubble because active players get to learn techniques that provide a safety net. So, its' like swimming with life-jackets. While perfect mastery of the market is clearly impossible - you can't perfectly predict human beings, the pulse of the market - its is possible to trend patterns of market behaviour, just as it is possible to understand other factors that define value and market response. Simply put, there are basics of investing that can be learned to provide an informed platform that can optimise performance in the market.
So, now, where do you want to stand? The choice is personal because there is a personal risk to be borne. Our responsibility here is to open you up to the possibilities that lie before you. The possible price too. The ultimate reward that could be realised. Yours is to choose what you want for yourself. Not any easy, we agree.
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