Black Money Business Jobs : What is the purpose of investing?

Discussion in 'Black Money Business Jobs' started by Shikamaru, Aug 31, 2011.

  1. Shikamaru

    Shikamaru Well-Known Member MEMBER

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    The purpose of investing, in my opinion, is the:

    a) maximizing of one's profit, gain, interest, benefit, advantage, acquisitions, fruits

    and

    b) minimization of loss, liability, and charges.
     
  2. MsInterpret

    MsInterpret Well-Known Member MEMBER

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    What are some con's for investing?
     
  3. Shikamaru

    Shikamaru Well-Known Member MEMBER

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    Risk, liability, charges, loss, debt, and taxes :D.

    Others include time element, fraudsters, ignorance of the investor, malfeasance of the party securing the investment, etc.
     
  4. Shikamaru

    Shikamaru Well-Known Member MEMBER

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    I'm a big fan of natural increase over profit, but this depends on the function in which one operates.

    Most investments are paper in one form or another, right?
    These papers are DERIVATIVES of value.
    These papers REPRESENT value.
    They are placeholders!
     
  5. MsInterpret

    MsInterpret Well-Known Member MEMBER

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    What do you know about investing in stocks?
     
  6. Shikamaru

    Shikamaru Well-Known Member MEMBER

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    A stock certificate is claim to assets (and profit) of a corporation.
    The certificate entitles a holder to rights and privileges such as voting shares as well disbursements of profits.
    In the event of liquidation of a corporation, you may receive proceeds from the liquidation. In most instances, probably not.

    Stocks are classed as equity securities and financial instruments.

    These certificates are traded on a (stock) market.
    Most peoples' interface to these markets will be through some stockbroker or brokerage.

    It is notoriously difficult to make an income off stocks alone. Only a percentage of a percentage of people are able to do it. These are your Buffets, Templetons, and others. The vast majority of people who invest in the stock market will lose money.

    The question I would ask myself with regard to stocks is what is my purpose for investing in them?
    Is it for purposes of asset appreciation? Cash flow though anticipation of dividends? Profit by way of trading?
    Do you intend to go long or short on stocks?
    Which market do I want to invest in? Pink-sheets? Small, medium, or Large Cap? NASDAQ? NYSE? S&P?
    By what form do I desire to invest in stocks? Stocks themselves? Mutual funds? ETFs (Exchange Traded Funds)? Stock options? Index funds?
    Many of these questions presume you intend to invest domestically and not internationally in foreign markets such as London, Tokyo, Shanghai, or other stock exchanges.
    How will I handle the tax implications of holding stock?
    How much money do I have to invest in stocks? How much in loss am I comfortable absorbing? Do I have a complete strategy for investing?
    How much knowledge do I have on the fundamentals and technicals of stocks?
    How much time can I devote to the stock market?
    Will I administrate my portfolio directly or will I employ some form of agent to administer it on my behalf?
     
  7. MsInterpret

    MsInterpret Well-Known Member MEMBER

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    I always wanted to invest in some stocks, but it just seemed so complex...And still does even when you explain it
     
  8. Shikamaru

    Shikamaru Well-Known Member MEMBER

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    I like to break it down this way.

    There is stock in the context of law.
    Stock in the context of accounting.
    Stock in the context of finance and banking.
    Stock in the context of investing and trading.

    Each context has its own definition for the term, 'stock'.

    To me, it is like a prism. When you rotate the prism, you get a different facet and appearance.

    Some of the better written books on a subject are the "Dummies" series. I'm sure there is investing or stocks for dummies.
    I have accounting for dummies. One of the better books I own.

    Or you could do like Buffet.
    If he doesn't understand it, he doesn't invest in it.

    For most people, the best investment they could ever make is in their own business.
    The return on investment from a small business will surpass what they would ever achieve from Wall Street.
     
  9. Shikamaru

    Shikamaru Well-Known Member MEMBER

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    To answer our original question another way, the purpose of investing can be to create income producing assets.

    Income producing are the magic words here :).

    Income implies cash flow.

    An asset that produces income for you rather than you producing income for you.

    I elect for the former :D.
     
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