The fundamentals of investment are so basic and in such plain view it is easy to overlook them.
That is why we should remind ourselves of them.
HERE IS A TWO MINUTE VIDEO from one of the all time greats, Howard Marks, covering two very basic concepts.
As he says, “risk is not volatility” and “investors invest”.
“risk is not volatility” means that the price of something going up and down (volatility) is NOT the same as permanently losing money (risk). That can only be achieved by selling something for less than you bought it. In this situation risk can be avoided by taking a few very simple, sensible, obvious steps.
“investors invest” means that they buy something in the belief that it will be profitable over time and they continue to own it until something better comes along. They do not jump from one thing to the next – technology stocks to property to crypto perhaps? – in the hope of making big immediate returns, that is simply speculation.
Again, with a few very simple, sensible and obvious steps, becoming a successful investor, and comfortable with it, can be easily achieved.
This is not rocket science.
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