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Investing
The Stock Market And Half Truths
10th August 2007
The stock market and half truths what's that about? When someone tells you a half truth they are not necessarily lying to you they just don't tell you the complete story. Now before I became financially enlightened I listened to my banker and trusted him with my finances. Hello? Why on earth would you entrust someone else with your money?
Like you the banker is also trying to make money. I was told the stock market will lose your money and it is too risky. Well I guess that the big type of success comes from taking risks. Has it ever crossed your mind that if the stock market was this really terribly dangerous thing no one would invest their money there? Like you I too have been firstly a victim of my own ignorance and secondly a victim of half truths from my banker. Before investing in any type of investment be it property, bonds, stocks, mutual funds or 401k plans you need to determine your investment plan. You need to decide what you want to achieve from your investment efforts.
This determines what type of investment will suit your needs and whether you are a short-term or long-term investor. This is something my banker neglected to tell me which makes it a half truth, he didn't lie he just didn't say anything about an investment plan. He did mention investing though hence the half truth. Yes investing on the stock market is risky but there is something called managing risk that is conveniently left out by most. There are measures such as what is known as stop loss to manage or reduce risk and losses. I will explain this in a later lesson.
My advice to you is set up your investment plan based on what you want to get out of making the investment in the first place. If you are looking to invest money that you want to use within one or two years then investing in the stock market can be quite a danger and is normally not advised. If you are looking at investing in stocks be prepared to invest for at least five years. Stocks are better over the long-term than the short-term. Investing opens you up to a whole new horizon of financial intelligence. Start learning all you can and don't let yourself be held back by half truths.
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. " - Warren Buffet
Comments (7):
Zed Says: Great quote from Warren Buffet! | 08.10.2007 |
Lance Says: You are so right Kevin I noticed that the more I read and clued up financially and approach my financial advisor the more "secrets" he lets me in on something that never happened before | 08.10.2007 |
Jennifer Says: Ignorance is expensive | 08.10.2007 |
Amy Says: Same here. I got advice from my banker and when I went and did my research I realized he recommended a far more expensive option to me | 08.10.2007 |
Nick Says: Generally if someone is trying to make more money out of you they won't give you an option which won't benefit them much | 08.10.2007 |
Ross Says: Stocks have proven be the riskiest but best investments over time hence the Warren Buffets and other guys that have become super rich from investing | 08.10.2007 |
Darren Says: Half truths are told to those of us that don't know much so its good to be informed hence make informed decisions, my two cents | 08.10.2007 |
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