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Why do you invest?
Rating: 1.18 (11 votes)
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I've noticed something about the ratings on my posts. I get the lowest scores when I write about "safe stuff". It's way too small a number of votes -- which may well be from different people altogether -- to draw any conclusions, but it did get me thinking, as did a comment posted by Walter Thatcher. I'm sure everyone who invests would say that they invest to make money, but I would venture to guess that there are other factors at play as well. The thrill of risk-taking, the pleasures of the chase as one ferrets out a new offering or a cheap stock that might skyrocket. Playing with numbers and finding real meaning where others only see perplexing complexity. I'm wondering whether the thought that a fund composed of almost entirely ETFs and cash left on its own through two months of roller coaster market performance could outperform the majority of portfolios in the competition was unsettling. Could something so boring really be successful? Could something done by computers outperform human judgment? When our son was 15, he stopped conversation at the dinner table by asking "Why do you and Dad talk about money so much?" It made us think. Were we too concerned with filthy lucre? I told him that I invest to put wind in the sails of the family, that people who don't have enough money to pay their bills are the people who are obsessed with money because they have to be. Being able to finance the fulfillment of dreams -- our own, our children's, our relatives', our friends' -- is why I invest. Why do you invest? I'd love to know. P.S. Be sure to check out Walter Thatcher's "Stocks for All Seasons"; it's wonderful. P.P.S. Interestingly enough, my boring "safe stuff" is paying off for me in the competition: my cash substitute DBV is one of my 5 most profitable holdings, and my commodities choice, DBC, has the 5th best return in my portfolio. | ||
Comments (1)
Why do I invest?
The simple answer is I want options and financial security helps open those options. I look forward to the day when the only reason to keep working is it's something I enjoy; investing is the only practical means to get there. Since no one cares about my family's future more than I do, I invest.
The much harder question is why do I invest the way I do. I find the financial markets very interesting and like being part of it. There is definitely a thrill in finding an under followed gem or recognizing something in the market that most seem to have missed or even following the market when it's right. I like the challenge of trying to beat the market, but am very mindful of the risks required to do that.
My primary reason for entering SLO is to learn, practice and evaluate my stock picking and portfolio management skills. I have no illusions of winning this thing. My objective is to use it to help evaluate 1) whether I can effectively run my own stock portfolio and 2) whether I'm willing to devote the time and effort it requires. Maybe the topic of a future blog.
Long answer, but I enjoyed thinking it through. Ken should have you start asking the question of the week.
Posted by Russ | September 29, 2007 11:02 PM