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Why investing IS important

Why investing IS important

If you would ask somebody the question how to make lots of money they would probably tell you this : get a well-paying job. While this is definitely true, it is only half the truth. Normally whenever somebody starts to earn money their life-style and their expenditures increase as well (this is especially true for students who often didn’t earn money before). Therefore they start earning a lot more while their bank balance stays the same due to an increase in spending.

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Timing the market and other bits and pieces

Timing the market and other bits and pieces

When is the time to invest? When will the next crash come? Stocks are too expensive nowadays because we had a big runup the last few years so investing right now is way too risky.

These are statements and questions you will always hear whenever there is a bull market. Many people think they know how to time the market. They think that certain stocks or indices are overpriced and try to hoard cash to buy if there is a crash. However, if somebody would be able to time the market, he could make a limitless amount of money. There is a saying “Time in the market beats timing the market”. As no investor can time the market accurately that makes sense. If you stay out of the market you also lose out on potential gains. To be fair you also eliminate the chance to make loses on your account, however, in a bull market the indices go up most of the time.

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Finding your personal investment style – Memory

by UseYourTheta 0 Comments
Finding your personal investment style – Memory

I will start of at stage 3 of my decision flowchart, shown in the initial investment style article. So I always have been a tech enthusiast. I love to build computers and recently I built one for a friend. Well actually that was a year ago but I recently build one for myself as well. Anyhow. Those of you who are into that kind of stuff know that the memory is normally one of the cheaper components when you build a computer.

I remember that I was negatively surprised by the percentage cost of the memory in the whole build. This got me thinking.

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Finding your personal investment style

Finding your personal investment style

As they are different ways to build a house there are different ways to invest. While the risk profile I talked about in my previous articles is definitely important, more profound questions need to be answered first. In order to make this easier on the eyes and on the mind I tried to channel my inner artist and created a quick flowchart. Keep in mind that this chart should give you a idea where to go from here rather than something you would follow blindly.

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The risk of investing

The risk of investing

“Past returns are not an indicator for future performance.”

Everybody who has ever read something about financial instruments like ETFs, stocks or other derivatives has probably seen this statement. It basically means that if a stock, for example apple, grew the last 20 years, it does not mean it has to do so continuously. To be precise the past development of a stock has zero correlation to the future development of the stock in question.

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Neat finance equations

Neat finance equations

If you don’t like math that’s okay, a lot of people don’t. If you are scared of equations and mathy-looking-stuff that’s okay as well as long as you don’t let it dictate your life. By that I mean wasting good opportunities like this because you don’t want to indulge on the following equations. The equations down below are some (basic) financial equations that are real handy and will enable you to get a better feel for potential investments.

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Use your timevalue (Theta)

Use your timevalue (Theta)

To improve their account balance someone has basically three options additional to working:

– Capital markets
– Real estate
– Working more (overtime, 2nd job etc.)

As most people don’t have enough money to buy real estate or don’t have the time/energy to work more it basically boils down to capital markets.

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