In reality, everyone is an investor and is invested at all times in something. If all you have is US$ dollars, then you are investing in a currency. All investments regularly change value over time. For example, historically, all fiat currencies lose value over time due to inflation and government manipulation.
There are three elements for investment success:
First – Disclosure. Most importantly, is the society in which you are making investments moving toward more disclosure of public information and general transparency? Or not? Societies are always moving in one direction or the other. The same is true for institutions and corporations. You need to understand the direction. It will affect everything in your life. The direction of disclosure will determine the success or failure of your financial plan and investment strategy.
Second – Geopolitics. In the modern world there is no isolation. Due to international politics, sovereign actions, technology, currency movements, climate change, trade, military actions, etc., every nation is affected in some way. You need to have an understanding of world dynamics to invest successfully.
Third – Asset Allocation. There are many things available for investment. Very rarely is a particular investment good for all times. Investments are always changing in value and you need to determine what type of asset or mix of assets is the best investment and when to accumulate that type of asset/investment or reduce your exposure to the investment. It is very dangerous to invest in any type of asset and simply maintain that investment over time. Historically, real estate, stocks, bonds, commodities, etc., have all had superior results during certain times and very bad results at other times. Sometimes their values can change dramatically and those periods can last for many years.
Often, investors are trying to do a plan or looking to invest in a particular CD, stock, real estate, bitcoin or whatever without examining these fundamental elements for success. Accuracy and results are what matter. If you are unsure about making these judgments, it is critical as to whom or what is directing you thru the process.
For more information, read:
INVESTMENT DILEMMA, By Joseph Testa
www.reasonatrisk.com