Investment is not an exact science...
Hello Community, let's talk about investment, let's talk about the future, let's talk about gambling...
Recently I read a phrase that said something like "Every investment is really a bet on the future", and first when I read it I thought "I really don't agree with what the person who wrote this article says", however later I continued reading and after finishing it, I said, wow, in reality the quality of security in any investment is relative, and we know that although many times the hopes usually cloud the reason a little, but, the experience hits and teaches you many times in a convincing way...
I have come to some conclusions from that reading that I did some days ago in relation to this topic of investments, I would like to share them with you and know what you think about it, of course, I will not say that I am 100% right, but at least at this moment it is part of my thoughts about it, let's start...
But let's see the next concept, I share it because I thought it was quite right, and in line with what I'm proposing:
"An investment, in the economic sense, is a placement of capital for future profit. This placement is a choice that resigns an immediate benefit for a future one and, generally, unlikely." Source
The last word in that definition is IMPROBABLE, yes, doesn't that seem right to you?
Seeing what we do today with our money or even our time, because it's not just about investing money, spending time on something in the hope that it will give us some economic benefits later on is also an investment...
Let's say I have 50,000 dollars, and I could buy a house and even a car here in Colombia, and I say to myself, I better invest in a bakery or a pharmacy, or both, after a year or two, or a little more I could (in theory) live worth that.
Of course, logic tells me that a bakery because it is a food or feed business could not fail, and even a drugstore because it sells something that is of prime necessity (medicine) should not fail either. So I decide to invest that money I have, that 50,000 dollars (I wish I really had it, ha, ha, ha) and I stop buying that house and that car I could buy...
But it turns out that the political conditions in my country are not the best, and an authoritarian government takes power and literally ends up appropriating many businesses with the excuse that it is for "the good of the nation", it will seem exaggerated or absurd, but I know that if it can happen, in fact in Venezuela it happened...
What would happen to my investment and that bet for a better future?
They would literally be gone. I don't mean that investing is wrong, and that it shouldn't be done, but the thing is that you always have to keep in mind that in every investment there is as much chance of winning as there is of losing, and that everything is subject to sudden changes. I think that this year has been particular in that aspect of sudden changes - and radical ones-.
For my part, I will continue to bet on the future, on something that is better and generates stability for me, but knowing that in the end everything is subject to change, for better or worse, but change after all.
Thank you very much for reading me.
I would now like to know your impression regarding what I have raised in this publication.
Have an excellent and productive weekend.
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There are a lot of investment types, some require your active leadership or participation like a bakery. Others are passive, financial type investments, for example, savings on bank accounts, bonds, or stocks on the stock exchange. Cryptos, gold, other commodities. All have different advantages and disadvantages, opportunities and risks.
There are huge differences between states, industries, too. "Developed countries" are more stable and the expropriation, nationalization of private property seems highly unlikely. Other countries "in development" are more insecure, dangerous, risky.
Colombian stocks fell 34 percent this year in USD terms. (For crude oil?) Other markets surged or jumped, for example some USA sectors.
But some people do it much better than others. Worth learning.
Hi @deathcross
Thank you very much for your comment.
I know this is your area, and you certainly know what you're talking about. I had no idea that Colombia had had such a decline, 35% is something considerable. And I live here in Colombia.
It seems to me crazy, those numbers look so bad, thanks for that link.
I have always thought that one way to decrease risks is by learning, I totally agree. And there are sectors that have had unprecedented growth, but others have gone into decline.
Yes, it is worth learning.
I saw a similar thing to that one that you said...
and that's a thing that people have to calculate in when they are investing in a country where is that possible to do... I know that it sounds bad, but it is like that...
But, the thing that happened THIS year in whole world, opens a new chapter in the book of risks... Closing down private businesses all around the globe, without helping them (I don't count a pity that governments "helped"), will drop a big shadow on everyone in the future who has an idea to OPEN a new business... That is one risk more that every1 will have to calculate... and that's not good from the "intestment view"
But, people tend to forget things in 1-2 years, so maybe I'm wrong... :)
Anyways, great post! Thanks for sharing!
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Thank you for your comment @ph1102
Yes, this year has been so particular in many aspects that it will surely have repercussions on the economy that we cannot even imagine now. You will have to keep moving forward to see what the reality will be, if people still have short-term memory or not.
But the possibilities for business via the web seem to be on the rise, and this year has further boosted this whole aspect.
When a state attacks private enterprise it is the beginning of the road to crisis in that country, I don't see it any other way.
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Greetings friend @josevas217.
All risk lacks security, because at the moment there are omissions of any certainty, therefore, I agree that all investment is relative, and certainly, when we make the decision we give up the immediate benefit, and focus our energies on the future benefit. Thank you for socializing this type of economic-educational content.
Good article, the issue with investments and with any business is that they have a risk and that is better to assume it instead of running away from the risk because the only sure thing in investments is that there are no guarantees of anything.
Very interesting topic.
I can't say or agree on that things are provably unlikely to happen as you bet for future... usually the bet is calculated done using fundamentals ...
You research the project, the potential, the use cases, the adoption, the team behind it, track record...due diligence.
But say its a time before all this can apply... say a start up, or Bitcoin 10 years ago and making an investment decision on it.
Its only few visiraries who would have invested in Bitcoin that time...as we would have thought - there is no one regulating it, can't understand the concept or that it has no Govt. support. People like me won't have taken the risk.
So, undertanding the fundamentals, and seeing it far ahead will take you miles rather than following the crowrd.
Right now, future looks bleak... and still we have not investment on basic things like water security, renewable energy, food security...we are missing out on reality and are really blind and stupid.
Also there is risk in everything - on getting married, getting kids...you never know what the exact future will be like for them and we believe its going to be all cool, but it may not too...
so really future is uncertain, it is always meant to be so and its determined by the element of the choices and decisions we have, big and small.
Making no investments and earning money alone is also a mistake...as capital appreciation won't happen. So, we just must be risk takens and play the game, of investment and life and provably not lose heart.
mistakes and your investments not paying off is part of the game, but you learn and grow, is it not?.
We can't be stable or stagnant all the time you know, need a force to kick us up and down, crypto is one such force for me, gives me a kick!!
Anyway.