How WILLFUL MISINERPRETATION in Financial Literature has taken a TOLL of SMALL investors?
March 14, 17
How WILLFUL MISINERPRETATION in Financial Literature has
taken a TOLL of SMALL investors?
Greetings from Hitesh! Market will
make a new high today in India and we dealt with the same yesterday. We also
discussed the formula of FAILURE – ignorance and lack of faith is the
main factor for failure in case of most of the people. The best way to deal
with your failure is to EDUCATE yourself. Now, when you open the FINANCIAL
literature – the most severe mistake has happened in interpreting the basic rule
of making money. Let me deal with that today.
85% of FINANCIAL EDUCATION in one sentence:-
The one sentence, which can make
you smart is - “There is no RETURN without
RISK”. I am sure you all must have heard this at some point or the
other. By just stretching this logic – suckers have modified the same as “more
RISK you take MORE return you can make.”
How NOVICE investor has been taken for a ride by just making
little changes as above?
He will do either of the two
things. Due to above changes he will operate on EXTREME - One by not investing
at all and other by investing heavily.
1.
He will see
RISK as loss and stay away from the market. He will invest his money in
so-called guaranteed return scheme or some sub standard investment ideas like
MUTUAL FUNDS or SIP. The end result will be he will die as normal person only.
He will never become RICH guy in true sense.
2.
Now, let us
see the other extreme – reading more risk as more return some fools will take
risk which they can’t bear and end up being on ROAD. These fools multiply only
gains by buying in bulk. I see many guys buys LOTS in FUTURES – their argument is
if share moves up by Rs.10, in lot of 1000 they can make Rs.10000 immediately.
Now, they have no back up if the shares goes down by Rs.20 what will they do?
How will they pay the MARGIN? Most guys end up losing Rs.20000. Now, he will
take more risk and more LOSS and the cycle continues.
“There is a SUCKER BORN every MINUTE”
AMERICAN SHOWMAN Mr. P T BARNUM
reportedly said this sentence.
Now, see the plight of SMALL
INVESTORS – the so called smart person takes the data of losing investors and
presents to the first category of investors – who are already RISK AVERSE. The
loss data confirms the belief of the first category and they go on investing
into SUB STANDARD investment avenues. Not only these, they continue to ADVISE
their CHILDREN to invest like them.
Mr. P T BARNUM was right 100% in
his saying above.
What are other such SENTENCES?
I can remember couple of sentences
while writing this post.
1.
No PAIN No
GAIN. The emphasis is on PAIN.
2.
If you work
HARD, you will be successful.
3.
If you are HONEST,
you will be HAPPY.
By changing the words in above
sentences – NORMAL guys have been taken
for a RIDE by SUCKERS at all levels. Since it has been PUT in your SYSTEM for
ages – you may find it difficult to agree with me. But, look at the facts and people
around you with OPEN MIND. You will see that installing such beliefs in your
mind, is SUCKING you.
What is the meaning of “There is
no RETURN without RISK”:-
Here the focus is on RETURN. When
you focus on RETURN – you will try to maximize the return and minimize the RISK
associated with it. When you focus on RETURN – you can link it to your DREAMS
or your GOALS. This motivates you to go for higher RETURNS while managing the
RISK.
If you study above carefully - you
will realize that you can’t get something for nothing in this world. In other
words – there is no FREE LUNCH. So, next time somebody offers you something
FREE, beware.
But by changing your focus to risk
– they have done a huge harm to your past generations. You have a choice to
change your DESTINY. Just change the focus to RETURN.
Have a HAPPY INVESTING.
Live With
Passion…Invest With Passion.
Hitesh Parikh.
Comments
Post a Comment