Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Sunday, 14 September 2014

Investment is Sure Lose?

A lot of people says that investment is risky, is a sure lose thing, is like putting money in casino, its a gamble.
Most would hear from parents, grandparents and friends that they or they know of someone who have lost a lot of money in the stock market. Many even went bankrupted.
Here is the interesting part: tell them to give you some real names of people who lost that much of money. Most of them will quote you TV drama names.
Actual Fact: TV make the stock market looks more dangerous than it is.

The danger of stock market is the same as driving a vehicle on the road. Putting someone who never learned anything about driving behind the wheels definitely makes it a dangerous thing. Just like not knowing anything about investment and randomly putting your money into the stock market, it is equally dangerous.

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To prove that stock market investing is not risky, look at the chart below:

The S&P500 is a index for the US stock market.
From 1950s to today, it is almost a upward only steady trend.
Have you ever wonder how can anyone ever lost money in such a scenario?
Ironically, people did lost money during this period because they tried to jump in and out, thinking they are Einstein and that they can predict when is the top and bottom.
Apparently there is a reason why the turtle wins the race.

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The world's top and best investor, Warren Buffett's advise for the public regarding stock investments:


So, the next time someone tells you that investment is risky, show them the chart above that it is really hard to lose money in the stock market if you took the turtle route.

Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

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