Investments not a one-size-fits-all.

We were in a rat race long before the internet got here. But with the advent of this web, with the long arms of our search engines, the maze just got worse.

Many people are going bonkers – win spectacularly or lose big”. Fair enough. Has the World Wide Web eased your investing decision making process? Or has it complicated it even more. Looking up investment choices has become like drinking from a fire horse. Much as you thirst for that investment, it is not worth galloping the choices without stepping down the pressure.

I was recently amused by a friend in recent weeks. The guy has no knowledge of the financial world dynamics, yet he had this to say; “People are making a ton of cash on options. I want to start messing with those options”. I smiled and asked him in the politest of terms. “How much do you know about securities trading”? To my amazement, he said Zero! I just told him that, well, the reason those who understand it are making a kill is because there is a number out there who are in the menu, not the guest list of the financial markets.

He was perplexed. So I discarded my rhetoric and said it plain. For my friend in question, “messing with options”, as he put it was taking a peril, not a speculative risk – speculative risk carries both chances of loss and profits. He was going to be mauled. It is a jungle out there, and the financial predators can smell a prey in Kigali, Rwanda while he lies on his back on the beaches of Dominican Republic.

Investments can be aggressive, which is basically ambitious and high risk or balanced with a 50/50 placement in high risk and low risk assets. Conservative investment puts money in low risk holdings.

Investment decisions requires in-depth understanding of where one stands in terms of age, risk preference, current earnings and potential earnings, the business environment, and tax legislations in the investment environment.

So, are you riding your investment train, or just hiking a ride?