To start investing, first stop speculating!
All of human unhappiness comes from one single thing: not knowing how to remain at rest in a room.
- Blaise Pascal
When it comes to stocks, most people are not able to draw the line between 'investing' and 'speculating'. In the garb of investing, majority of people are simply speculating! And the worst part: they might not know that they are speculating! Could you be one of them? Read on...
You are speculating and not investing in all of the following scenarios: 1) You are trading stocks intra-day, 2) You are taking positions in futures and options (when not for hedging purposes), 3) You are buying an equity mutual fund or stocks just because market is rising and you plan to exit as soon as you make your 10%, 4) You are buying stocks or mutual funds with a time horizon less than 3 years, 5) You are buying stocks on basis of 'tips' or media reports and then holding on to your losses if the bet did not work, and many more...
So, what actually is the definition of investing? As per Benjamin Graham, also known as the father of value investing, 'An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative'.
Still not clear? Just a cursor look at your past track record should suffice... How? Well, because 'people who invest make money for themselves; people who speculate make money for their brokers!'
To reach your long-term financial goals, you must be sustainably and reliably right
And that it what we, at Inertia, help our investors to achieve through the power of investing...