Investing boils down to:
There are many ways to invest money, each has its advantages/disadvantages
The primary point is risk, which is about how easy it is to lose money
Risk is unique to each individual, and to each investment approach it changes over time and is difficult to quantity
Investing is counter intuitive:
selling high involves taxes unless in an IRA, and the relinquishment of the hope of more gains after gains (greed)
buying low involves waiting for sales prices, when everyone else is losing their money and minds
buying low requires overcoming hard wired human fear of more losses
The future is always uncertain, sometimes more uncertain than at other times.
There is always, always event risk, because humans are unpredictable and emotional.
The event may be one of company, industry, systemic banking, technological, political, geopolitical or natural
but these can seldom be predicted or prepared for in time, and will happen to everyone at some point in time given a long enough time.
And these event risks can happen to you as well, they are not limited to the market.
So you pay your entrance fee and take your chances, and if it doesn't work out, cut your losses quickly, if there is a fire, you want to panic early and be out first to avoid being trampled.
Simple concepts, most difficult game to play and maybe win ever invented.
|