RichNotFamous.com

Covering the Nut

It is very important not to invest money which you will need to pay the rent or to put food on the table with.  Invested money should be money which you can do without for at least 12 months.  We must remember that no matter how good the investment is, they don't all turn up rosy right off the bat.  If that were the case, we would all be getting very rich, very quickly.  A lot of people look at the stock market as a way to get rich fast, sadly this is not the case.  Also sadly, the only news that we see is news of those companies that had stock prices which shot up to the moon.  This makes people think that if your stock does not do the same, then you have a loser and must move on to the next stock.  Let me say to you that nobody ever got rich overnight in the stock market and stayed that way.  That having been said, let me do a little bit of explaining.  Yes, there are people who got rich overnight in the stock market.  But those are people who were willing to take substancial risks.  It is either in their human nature or their investing stategy to take risks of that sort.  They will keep on taking these risks in hopes of hitting it big every time, but will end up giving back their profits.  This is also assuming that they have not been taking these risks in the past and that their recent win had merely gotten them even for their investing career.

I don't know about you, but if I have invested in a volatile stock, I can't wait for the market to open up the next day in order to find out if I am going to gain or lose 10% of my investment.  This kind of volatility does not let me sleep comfortably at nights.  Therefore I will stay away from those stocks.  Don't make the mistake of thinking that there is a replacement for a good night's sleep.

Just remember that there are no sure shots, but some investments do have less risk than others.