Listen I get it, stocks/bonds/ETF’s and markets in general scare a lot of people. You don’t get them, maybe its too complicated or you just don’t have the time in the day to research a stock pick in depth (like you should be doing if you are going to buy). Look, it does not matter what you do in life, you NEED multiple channels of income. Don’t put all your eggs in one basket, ya know mush? So I am going to give you the one simple reason why YOU have a HUGE advantage to other investors.
Before I go any further, an ACTIVE TRADER is not an INVESTOR. Traders use up and down swings in the market daily to trade huge amounts of securities and turn a profit, if you can do this I respect the fuck out of you, it is extremely hard and time consuming. INVESTORS look for long term investments with growth potential, or perhaps they are undervalued in current market conditions. When an investor buys he buys to hold for YEARS, not days, not months…..YEARS.
Back to YOU. YOU (given you are ehh 25 or under) have a huge advantage in the market for one simple reason, risk. You, at the tender young soft skinned age you presently reside, can absorb risk far better than say the 40/50/60 year old investor. Why? Well time for one. You can invest in a new and potentially volatile company/industry knowing that its growth potential (say in 10 years) is phenomenal. However, do you think the 60 year old man will take that risk? Not with retirement around the corner he wont. You have time to throw money into an emerging market index and wait it out. Quick example: Nikkei 225 is the Japanese exchange that houses the 225 biggest corporations. On May 1st ’09 it opened at roughly 7500…….yesterday it closed at 15,800. For those of you who are incompetent, it has doubled in roughly 5 years. DOUBLED. As in if you had $1,000 in ’09 you now have $2,000 FOR DOING ABSOLUTELY NOTHING. Passive investing mushes, you buy and then you wait. It does not get any simpler.
Obviously things can get far more complex than this, but I just wanted to take a couple minutes to show you that there is absolutely no reason why as a young American chasing your dream you can not provide yourself with a new channel of income in the form of securities. Your youth is a prized possession in so many ways, the ability to sustain a higher level of risk being one of them.
Be bold! Grab your balls and make a commitment, don’t just talk about it…..do it!