Why investing?

If we see the trend of the last 30 articles they are related to investing. More specifically related to behavioral finance. After all, we win battle in the mind first then on the ground. Having the right mindset will ensure that one stays on the right track. However, we never discussed why should one invest?

Why do you invest?

Mostly people do that to make their livelihood or see someone else making quick money. Who does not like quick success? However, if we read history we will realize that except for some rare exceptions, most of the miracles of humankind are long-term. Just a healthy reminder, Rome was not built in a day. Investing is too a long term game. Introspecting will help you understand, why are you in investing and you can always change your track by coming to the right path.

The average closing price for Dow Jones in 1964 was $834.09 and in 1982 $884.52. Just 6% increment over a span of 18 years. During the same time, Warren was able to produce 20% of annual growth for his portfolio. That’s what make him the greatest investor of all time. Investing is simple but not easy. Like test match, investing is game of temperament. Business is game of uncertainty. There is climax now and then. It doesn’t have a smooth curve. Actually, its good to have up and down as the business progress more then.

Coming back to the topic why investing. Well it is because it is the best way to own a piece of business you like. May be you want to set up a search engine like google but don’t have the resources. However, you can buy the share of the company. Indirectly you are a minority owner of the business. Don’t treat share just as a piece of papers. Through the stock, you are owning a company. Don’t buy the stock, when you don’t want to own the business at the first place.