Best Trading Strategy Blog

February 27, 2012

Investing, What Is It Really?

Filed under: Stock Market — Tags: , , , , , — Donald Scott @ 12:51 pm

Investment is an expansive word that encompasses a wide variety of things, but on tracing the word back to its roots, it is amusing that this word finds its origins in the Latin word ‘vestis’, meaning garment. Digging in a small deeper, we find that the word was used in reference to putting things (money or other claims to resources) into others’ pockets, which though simple, is the most effective way of defining this word. By investing our money, or resources, or time for that matter, we are making a definitive contribution to an activity or the acquisition of an asset that is capable of producing a recurring profit. But the flip side to this two sided coin is the use of the misnomer profit, which is not necessarily what the investor ends up with. Investment in financial circles, is of two types -

One way is called a ‘Real Investment’, which means you really get something tangible like a car or home. The other way to go about it is to get your hands on ‘Financial Assets’. This refers to money in a bank, or stock market shares, that you can sell and trade as you please.

The way investors see it, the only thing you should worry about is the “recovery” of your investment. They want to know if they made a smart go or a huge mistake.

So how do you find the right balance to ensure a fantastic return? The trick is to be able to sort out and pick assets that have the best probability of success. But beware, even some of the best laid out plans can fall flat due to undesirable circumstances that are beyond the investor’s control. It’s an investor’s ability to analyze their situation and take a calculated risk that makes the difference when it comes to success.

One often hears or reads about investment guaranteeing immediate results. I would add that to redundancy in wording. A key in investing is patience and persistence. One cannot expect his input to immediately produce returns. A parallel can be drawn between the lives of an investor and a mosquito. One cannot expect returns too soon; even a mosquito doesn’t get a pat on the back until he’s nearly completed his task.

During the course of writing this article, some research on the internet led me to many sites that gave tips on successful investing. Kind of surprising is it not that with such potent advice available you don’t find as many Ambanis or Donald Trumps walking down the road. The real reason is that you do not become a successful investor by reading about how to become one, but by going out there and developing this intuitive feel to the ground reality. Technology is growing by leaps and bounds and this will only enhance your ability to keep in touch with your investments. But it is the discretion of the investor whether he adapts to this technology and raises the bar just that small bit more for his competition.

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