“ In investing, what is comfortable is rarely profitable.” - Robert ArnottĪs reward depends on risk, generally, the safest investments return the least. But what if they do? Jeff Bezos took those bets and became one of the wealthiest people on the planet. Most investors will dismiss a majority of the best and most lucrative investment ideas simply because they probably won’t work. “Given a 10% chance of a 100 times payoff, you should take that bet every time.” - Jeff Bezos Understanding differences in risk is crucial to understanding how the risk-return tradeoff works. For example, stocks are considered much riskier than bonds because they are more susceptible to market fluctuations. As an investor, it is vital to realise what level of risk you can tolerate and how that can translate to returns when choosing investments. However, play it safe, and you will most likely have to settle for modest returns. To make a considerable amount of money, you must take the chance of sizeable losses. There is a tradeoff between risk and return. “The biggest risk of all is not taking one.” - Mellody Hobson Investing is a long process that over time delivers lasting and impactful results. Not that you should avoid risk altogether, but rather be scrupulous with your decisions and careful not to gamble your money away. More often than not, investing is a waiting game, requiring much patience and planning. If you want excitement, take $800 and go to Las Vegas.” - Paul Samuelson “Investing should be more like watching paint dry or watching grass grow. Thoroughly research your moves, rather than basing your decisions solely on popular opinion. “The stock market is filled with individuals who know the price of everything, but the value of nothing.” - Phillip Fisherĭon’t take shortcuts for rapid financial rewards and focus instead on long-term gains. Rather than trying to predict growth, use fundamental analysis to get a thorough understanding of the company, its prospects, its competitive environment, and whether the shares can be purchased at a sensible price. Research, research, research! According to Peter Lynch, you should invest in what you know, a company that you’re familiar with, and then thoroughly investigate it. “Know what you own, and know why you own it.” - Peter Lynch Investing can foster much higher returns, especially over a long time. ![]() This is another testament to the fact that keeping your money hostage on a savings account will ultimately lead to measly gains. ![]() The only reason to save money is to invest it.” - Grant Cardone Start small, get up-to-date with the basics, and make that money grow! While an intimidating prospect for a beginner, it’s worth considering. If you want to maximise your money, you have to make it work for you, and investing is the best way to do that. That money, however, stored on a savings banking account will have minimal gains as the interest rates are typically meager. Investing in a savings account is undoubtedly a smart move – money saved for emergencies or rainy days. “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” - Robert G. As you start your journey in investing, it is essential to remember that you are still learning, and rather than trying to be brilliant, try instead to avoid making stupid investing mistakes. Each reckless decision you don’t make will add up and benefit you in the long haul. “It is remarkable how much long term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger That’s why many investors, especially beginners, find index funds preferable investments to individual stocks. Also, it is widely considered one of the smartest moves you can make when investing. Index funds are affordable, enable greater diversification, are generally low risk, and generate attractive returns over time. By investing in index funds you can own a slice of a wide array of companies. ![]() Just buy the haystack!” - John Bogleįinding the next Facebook or Apple can be challenging, but not a reason to miss out on the action. “Don’t look for the needle in the haystack. eToro USA LLC does not offer CFDs, only real Crypto assets available. The value of your investments may go up or down. EToro is a multi-asset investment platform.
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