3 things to raise here:
1. One of the basic questions in investing is:
how much of your principal are you willing to risk? how would you feel if your investment shrank by 10%-20%-30% in a few months? would you stay awake at night worrying about it?
An answer to that will shape how much your willing to invest/risk and the kinds of returns that you might expect.
2. I would advise FWIW: money invested is best invested in ways that can get a regular return:
1. a business
2. dividends
3. interest
4. royalties
5. rental
Why? That way you get a hold of the cash, and you can decide how to handle it. Invest more? Diversify the cash? Conserve the cash? Spend the cash? But you decide. Otherwise other people decide… If there's no cash return regularly, you're banking on the performance of the company and/or its stock price over the next few months/years/etc. Most investors purchasing stock in this way fail to have any 'safety margin' in the event that the stock doesn't rise, or falls… I'm pretty sure Berkshire Hathaway didn't get rich buying over the counter stocks or investing in the way that most of us try to do!
3. I have become quite disillusioned with traditional investing media/financial companies because of the refusal to offer critical perspectives on companies, refusing to bear responsibility in times of exuberance or in times of drought. Mostly, I refuse to trust people who don't know how to make money themselves, but are happy to work with an organisation that looks after people's money.
Ex. we go to doctors when we are sick. Doctors are people, too. They get sick, too. So they know what it's like to be sick. They have an UNDERSTANDING.
Why would you go to a banker and ask him/her how to make money? Or a financial product seller? Why? All they probably know is their job. They've never likely had to make money in business. Why would you trust them with your hard-earned money?
4. The best investment you can make is in your knowledge of the investing world. But if you wish to invest seriously and make some serious money, that is what you must do. Otherwise, you're just marking time.
Kenneth
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