Tag: investment

Three Costly Investment Mistakes You Need To Avoid

Committing mistakes is a part of life, and is an essential part of our progress. However, certain mistakes are too costly to be a part of your learning process. Especially in investment, where you’re talking about your money, you can’t have too many mistakes in your portfolio.

Here are some of them so you can avoid them in the future.

1. Confirmation bias

You may believe certain things about market conditions and research for information to support those beliefs. This is dangerous as you might be ignoring other information that could be valuable in your decision making.

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2. Anchoring

Times are changing faster than ever before, not only in technology but investment as well. You may fall victim of “anchoring” where you become fixated on past information and then use that information to make investment decisions.

3. Herd mentality

People like to “belong.” It’s in our DNA. This desire could motivate you to pursue an investment just because it’s the trend and everybody’s doing it. Study and weigh the investment carefully before committing.

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Hi there, Steve Sorensen here. I’m a certified public accountant and business writer from Colorado. I have a strong background in business and finance. I also offer advice to companies on clamping down on employee embezzlement. Visit my blog to know more.

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The Unbreakable Bond Between Investments And The Economy

A country’s economy expands with the improvement of capital goods structures and the increase of capital stock. This is all tied to capital investment. Without it, no economic expansion would be possible. When investors buy capital goods like factories, machineries, transportation, computers, tools, instruments, or anything that leads to people being more productive, the money used to purchase all this is then termed capital investment. The important thing to consider is that the equipment (bought by financial capital), would need humans to design, build and operate.

PHILIPPINES - FISHERMAN IN PORO POINT
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Now let’s get to the interesting part – how all this helps our economy expand. When capital goods are improved, the more productive we all become. Look at the fisherman who once fished with a small boat and a small net. He invested in a bigger boat, and some machinery to haul his new mammoth-sized net. He caught more fish than he ever did before. Mr. Fisherman now has a bigger house, an extra car, and a better life. Little did he know that he helped the economy expand.

Another great thing about the increase of a country’s capital investment is the subsequent improvement in the quality of research and development – in businesses. Better R&D means higher productivity. Workers are more efficient and what they produce are better. Then they become like Mr. Fisherman, with his better life.

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Hi there. My name is Steven Sorensen, and I’m a CPA and business writer based in Colorado. Learn more about business and investment by checking out this page.