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How to Evaluate Load vs. No Load Mutual Funds
If you have been dealing with mutual funds for any length of time, you undoubtedly have faced the question of which is better: Load Funds or No Load Funds. If you are new to investing, "load" simply refers to the commission paid to the broker...
How To Realistically Set Your Fees - Part 5
How To Raise Your Fees
There comes a time when it is inevitable that you must raise your fees in order to maintain both your profit margin and income level. You will find that the greatest resistance to this comes from your oldest clients.
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Investing in the Stock Market
From the book 'The Stockopoly Plan' by the author Charles M. O'Melia There are several factors an investor in the stock market should consider: 1. All stock purchases should be commission-free. 2. All stocks purchased should be from a...
Investing: The Art Of Making Your Money Work For You
There is a lot to know about investing. It all depends on what type of investing you are interested in as well. There are many different types of investment options out there. So what is investing, specifically? When you invest, you are paying in a...
Real Estate Investing - Buying Pre-Foreclosures?
So you wanna buy pre-foreclosures? or at the courthouse steps? So many people ask us about this. Here's our '30 second seminar' on it. If you're going to buy PRE-foreclosures--after the seller is behind on her payments, but before the lender's...
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Investing and Speculation
People often see other people's decisions as the result of disposition but they see their own choices as rational!
Investors frequently trade on information they believe to be superior and relevant, when in fact it is not and is fully discounted by the market.
On one side of each speculative trade is a participant who believes he has superior information and on the other side is another participant who believes his information is superior. Yet they can't both be right!
Speculation (a.k.a. gambling), is not investing, and in one form or another has been around forever!
Many researchers theorize that the tendency to gamble and assume unnecessary risks is a basic human trait. Entertainment and ego appear to be some of the motivations for people's tendency to speculate. People also tend to remember successes, but not their failures, thereby unjustifiably increasing their confidence.
"Psychographics" describe psychological characteristics of people and are particularly relevant to each individual investor's strategy and risk tolerance. An investors background and past experiences can play a significant role in the decisions an individual makes during the investment process.
For instance, women tend to be more risk averse than men and passive investors have typically became wealthy without much risk while active investors have typically become wealthy by earning it themselves.
The Bailard, Biehl & Kaiser Five-Way Model divides investors into five categories:
Adventurers:
They are risk takers and are particularly difficult to advise.
Celebrities:
They like to be where the action is and make easy prey for "fast-talking brokers."
Individualists:
They tend to avoid extreme risk, do their own research, and act rationally.
Guardians:
They are typically
older, more careful, and more risk averse.
Straight Arrows:
They fall in between the other four personalities and are typically very balanced.
In speculation two things will be always around:
A. There will always be people willing to speculate and
B. History always repeats itself!
Speculation objects, rules and technological methods will always be changing. But, what has happened before will most likely happen again.
Whether it's tulip bulbs, precious metals, bonds, lottery tickets, ball games, or stocks, human nature is human nature. Ignorance, fear, greed and hope determine how people react and thus how prices move and markets behave.
People have speculated on almost everything at one time or another. Speculating, trading and investing on stock prices have become an essential part of our lives and economy. Trading is just another word for speculating, and investing is nothing more than speculating, except that it supposedly encompasses a longer time horizon and for some reasons it implies less risk.
Speculation and gambling are similar, with a few important differences. One major difference is that sometimes, successful speculators profit due to their skill, while gamblers prospect due to their luck.
Whether a trader, a speculator, or a gambler in all cases the aim is to make a lot of money in a harry, and to be able to know when not to invest!
About the Author
Copyright © 2005 Ioannis - Evangelos (Akis) C. Haramis
haramis@greekshares.com
http://www.greekshares.com
Ioannis - Evangelos (Akis) C. Haramis was born in Athens, Greece in 1951. He studied in Greece, in USA and in Belgium and has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and the editor of http://www.greekshares.com
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| Investing: Stock Quotes, Charts & Market News - MSN Money |
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| Better Investing - We'll show you how! |
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| Dow Jones, Nasdaq, S&P 500, stock market data - CNNMoney.com |
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| Investment - Wikipedia, the free encyclopedia |
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| en.wikipedia.org |
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| Investing In Bonds |
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