The stock market is filled with slang, catchphrases, industry jargon and complex investment structures. Our goal at 8020 is to educate our community on all the different opportunities and challenges that investors are faced with in bit size articles.
For the more seasoned investor, making an investment is not nearly as terrifying as someone who is just getting started. I would never jump on the back of a 2,000-pound bull and give it a ride, but I am sure if I had done it 100 times, and survived, 101 times would not be nearly as terrifying. Investing is no different, and you get better the more you learn and experience.
Scoring Vs. Investing
Bull riding is scored 50% on the rider and 50% on the bull. As an investor, you need to take the same responsibility for your investments. Investing is 50% YOU and 50% the INVESTMENT. Be sure to do your homework. Look at financials, find the most recent PowerPoint or investment one-pager that give you an idea of milestones and make sure they have a healthy/happy investor base. ie: 8020stocks!
Where to find help? Always leverage a trusted investment advisor and/or connect with friends or colleagues that have good investment knowledge. The strength of your investment network will help guide you through the trials and tribulations of investing. Leveraging others' experiences to benefit your investment wealth is just plain smart. Cowboys don't just jump on a bull and hold on. Its years of training and learning. 8020Stocks is designed to provide you access and opportunity to learn about investments, become informed, ask questions, and see what other investors ask. 8020Stocks is an investment network which you can access 24-7.
Emotional Roller Coaster
I can only imagine the emotional roller coaster a bull rider must go through when he straps his hand to a 2000-pound piece of muscle and fury. If they let their emotions get the best of them, they would never be able to do what they do and it would put their lives at great risk. These cowboys check their emotions at the gate, focus on the task at hand, stick to their game plan and count to 8!
Investing can be a very emotional activity. You may not be putting your life at risk like a bull rider, but you are putting your financial wellbeing at risk. Investing generates emotions of fear, greed and sometimes outright depression. When these emotions get the better of your investment decisions, you will lose more than you win.
As an investor, you need to stay focused on why you invested in the first place, stick to your investment strategy and be conscious of your timeline for the investment. That being said, companies and markets do change and you may have to rethink the investment strategy. Again, a good advisor and/or investor network will help you make a more informed decision. Always remember:
You can always get back up on that bull if you have your health... Stock market volatility is not a straight line!
80-20 Connect is bringing a disruptive change to the investment industry by giving the average investor more access to their investments. Investors need to become a part of their investment success and become advocates for their investments. This, in turn, will benefit your investments as it builds a stronger, more informed investor base. This is no different than companies who focus on building good customers and purging bad customers. It’s just smart business, or in this case, investing.
Risk and Reward
Not all bulls are created equal, and not all investments are either. The bigger, the badder, the uglier the bull, the better chance the bull rider has of getting a championship score. There is also a greater chance of being thrown off, stepped on, gored or tossed around like a rag doll. Investments are essentially the same. The higher the risk, the greater the reward, but the greater probability of potential loss.
The benefit of investing versus riding a bull, other than the obvious, is that you have time. Most high-risk equity investments are early stage or smaller corporations. These corporations will need time to develop their customer base, refine their product offering and increase their market share. As companies grow, have stronger balance sheets or become cash flow positive, they become less risky.
Many unsophisticated investors invest in these young companies thinking they will get a large return on their capital in a relatively short period of time. These types of investment windfalls do happen in the right market and with the right opportunity, but in most cases, you are in the investment for the long haul.
As an investor, if you want to make these high risk, high reward investments, you better find companies you really like and/or believe in. If possible, you should look for ways to support the underlying business or equity of your investments. In a perfect world, you, as an advocate shareholder, could receive additional value from your investment over and above an increased value or income distribution. Although this would seem like common sense to an average person, we are not seeing enough of integration between the shareholder and customer, aka: the "INVESTOMER". The relationship between the investment and the shareholder is not close enough in our opinion.
In closing, don't just jump on a bull and go for a ride and don't just buy stocks because you saw a good social media post, op-ed article or were promoted on some board. If corporations don't want to talk to you, you shouldn't give them your money.... PERIOD!
Interested in 8020 Connect as a potential investment?: http://bit.ly/8020Group
Be sure to join our community. The investment industry is about to change.