Investing Is Too Risky, Is It So?

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Investing Is Too Risky, Is It So?

Everyday I meet new people and we discuss a lot of things, including my hobby of investing.

Most of the people who do not invest have an interesting point of view that investing is too risky, and they’d rather buy a house, keep their money in savings account and so on. I would agree that investing is quite risky, especially if you don’t have an investment plan and basic knowledge of the market mechanisms.

Buying (or investing in) a house can be a lot more risky then buying a stock of an established company. You can sell stock at anytime if you see bad signs. Selling a house in a downgrading neighborhood can be more problematic, and the losses can be bigger. Remember, Rich Dad said that your house is not an asset if it does not produce a positive cashflow?

Working as an employee for a single company has a lot of risks as well. Even big companies may lay off up to 10,000 employees at a time.

Keeping all your savings in US dollars (or your currency) in your savings is risky. If your currency declines against other currencies, your money is worth less. Inflation helps to make your money cheaper at the annual rate of 2-4% in most developed countries.

So, not investing is risky, too. To reach your investment goals, you must learn to accept some risk in your investments, and keep on reading as much as you can about market structure, nature and investment mechanics!

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This entry was posted on Sunday, June 3rd, 2007 and is filed under Opinions. 702 Views. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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