If we understand how businesses operate, we will have to note that they will release their results at the earliest every quarter. Even listed companies will have their accounts audited and reported on an annual basis for all their investors and the public. In other words, it should be highly unlikely that we invest today and we get returns from our investments within the next few seconds, minutes of even days. Those could be called trading, perhaps? Yes, arguably also a form of ‘investment.’ Do we then know what is an investment and how do we start this journey of potential rewards after some time?
I love this statement (at the very end of the article) from an easy to read article here: Article in cnbc.com The writer quoted many investment experts (I do not know any of them but I am very sure they are good investors since their views are featured in cnbc.com). The writer also reminded all of us about the memories of the global financial crisis as well as the 2008 downturn. It says something very true yeah. With interest rates being low and even negative in some places, this will continue to suppress cash savings. Thus not doing anything at all may just do more harm than good.
However, what and how do we start to invest then? Briefly, we follow these five steps. First is to set a goal. Secondly, we need to have decided on a timeline. Third is to know what’s our risk tolerance. Fourth is to ensure our investments are diversified. (Leaving all eggs within the same nest is likely to be extremely risky!) Next is to know the fees which we will have to pay for those investments and last but not least is to forget about those investments! One of the contributor to the article said, “Investing should be as exciting as watching grass grow.”
It’s tough to watch the grass grow. Perhaps we could see changes every couple of weeks but otherwise, it will stay almost the same. I invest into the unit trust every month and I have learnt not to look at it except when I get some annual statements. I have also started to invest in Stashaway since last year. Investing can be easy via Stashaway
If we look at the property market, then it’s even more harder yeah. Property prices should not be rising every now and then. Perhaps inflation numbers will help the prices to inch upwards every year but I think property investment should be like ‘watching the grass grow” kind of investment too. If it goes up and down every other week, I am not sure if I could sleep well anymore. Happy understanding!
Next suggested article: Impossible to afford a property? Never!