Good investment-Why people think time and good investments go together
Good investments report progress over a period of time, usually a summation of upward trend over long years. while bad investments tend to zig-zag downward over the corresponding period. This happens because, originally, the business was built around sensible idea, sound business judgement and execution.
You will not know if a business is soundly built, right from the start, because it is not time tested, and investors do not have a period of repeated profit earning. Because of this, and the role that emotion of the moment plays in the individual’s investment decision, people miss good investment opportunities by relying on tips from non professionals.
That is why good investments opportunities are, sometimes, so hard to find. People have not learned that investments that do good for a while can peter out due to non enabling environment or bad management along the way that choke not only to the capacity of the funds to earn interests but even to the funds themselves.
In the same way that age and experience improve the ability of individual to do their job better, so do good investments report work done on your assets or investments that improve over time, reflecting this improvement through a show of increased dividents and income. Your original investment becomes like a fixed deposit inside your bank, safe and not subject too much to the vagaries, whims and caprices of the business climate out there. That is why such investments are rather restrained and interests on them are, usually, at the most, around 10-12 per cent.
For instance, few classifications of stocks would enter this category because, except in case of some blue chip Godzillas, most stocks tend to be volatile. That is why, even though you can make good money in stocks, and sustained one at that, you will need to have done some major research of the companies you are investing in, to see if their financial practices, their annual statements, the quality of staff, their experience, performance in recent years, give the possiility that they will be there for the long haul.
The real kick, as we said, is that there is no crystal ball that such investment will be good or bad, not just for the reasons of the unstable nature of markets and emotion, but also for the recent spate of discredited behavior of major investment houses and icons of industry that behaved like moral skunks, the Enron, the Maddoffs and all.
Good investments, given these vagaries of business climate and our loss of innocence, the innocence of the age when a handshake was enough to seal a deal, good investments might reside, perhaps in playing safe, in creating a basket of investment instruments, thereby not putting all our eggs in one basket. Like everything in life, things change, and rapidly today more than any other time in the history of human exchange of goods and services. That is why, if you are too busy or somehow unable to keep up with trends in the market, having a ready help to guide or manage your funds for you, might maximize your survival and hopefully enhance your ability to come up tops, down the road.