Is the economy in a recovering stage? I am not an economics expert so I cannot comment on this.
However, I understand from many of my friends that the stock market is going up and now is the best time to go with the trend.
On hearing thisI begin to worry. Why?
I am not an investor. I currently do not invest in shares because I think it is a risky business. Nevertheless, I believe that the stock market has huge potential for gains. But it is meant for the prepared.
And this is why I worry for my friends. You see, I questioned their investment strategy and their answers are like ‘watch the news’, ‘check the charts’, ‘predict the future of the company’.
To me, these are techniques that are useful, but very risky. The reason is if you are investing in shares based on gutfeel or news a.k.a rumours, chances are the chance of success is as good as going to a casino. There are no fundamentals involved. Fundamentals like analyzing the company’s reports, knowing its intrinsic value and understanding its potential for growth, are crucial to buying a share.
To me, a share is not just a number that you see on the screen. It represents an interest in the business of the company and its future.
The stock market is going up now and it’s easy to make a killing. But what happens when the next market crash comes? I cannot bring myself to imagine how many will fall prey again to the cruel economy.
That is why I am not taking the ride now, for I am not prepared. But I am preparing, learning the fundamentals, and will apply when I have gained enough knowledge and confidence. And I will invest based on fundamentals and not on greed.
I believe that being prepared is the secret of success.
What about you? Do you have a strategy for investment that you would like to share? Has it been working for you? If you do, please leave a comment for us all to learn.
I’m not an investor and wish I had the money to invest. I think that for somebody to be successful in the stock market, they need to look into the product and services thoroughly.
My thought is always, what do people want, and who would want it. People who bought stocks in things like Nintendo, Microsoft and Apple for example. Some probably did get very lucky, while others knew it would work.
There are those who use stock trading as a gambling game. Than you have the ones who think of things that will always make money, like toilet paper or no. 2 pencils.
Thanks Beth,
I too wish I have the money to invest. And I hope to be successful rather than lucky when I do have the money to invest.
I like the story–has a very Asian philosophic feel to it. Many Westerners like to think in black and white, good or bad dichotomies, but Life really is full of complex levels of meaning.
I hope your blog goes well, and that you will come visit me at mine @ http://cherylsolis.bravejournal.com -Comments welcome!