The Beauty of Stock Investment


Stock market is one of the world best inventions. It is a place for business owners and entrepreneurs to get funding to expand their already successful business and to fuel their innovations to make the world a better place. It accelerates the growth of great businesses.

Great businesses create the most value and make the best use of resources. The end result is stock market makes everyone richer.

It is also a place where you, as an investor, can find your best investments. It requires relatively little physical work to generate promising returns. This is what makes stock market an attractive destination for investments.

By investing in stocks, you own a piece of the prospering business. You are a business partner, together with thousands of other shareholders, for the business that is run by savvy entrepreneurs or experienced businessmen.

Usually a business owns valuable assets like properties, brand, intellectual properties, products, lands, etc that are worth a lot money. By being a shareholder, you own a part of these assets. It is similar to indirectly buying and owning lands and properties with the exception that you don’t have to manage them yourself (sweet). It is hard to buy (cheap) land nowadays, but it is relatively easy to buy (undervalued) stocks.

I always dream of starting my own business because all of the world richest men own businesses. As most people know it, running a business is very risky especially for someone who has no prior experience. Most businesses fail. However, with the help of stock market, you can be a business owner or owner of multiple businesses at the same time and also at lower risk. As a stock investor, you can get out of a business easily at the first sight of trouble. You can’t do this when you are the actual owner of the business. Worst case, you only lose what you invest in. You get the benefit of being a business owner without bearing the full risk of running a challenging business. It is sometime cheaper to own the stock than actually running the business yourself.

In fact, the more I understand the difficulty of owning and running a business, the more I appreciate stocks.

Inflation is a monster. It eats away your purchasing power. But not with stocks. Your stock investments are hedged against inflation. Businesses raise prices to cope with inflation. They are always ahead of the inflation. In other words, inflation actually protects your investment.

Plants need time to grow, so as businesses. Businesses take time to make profit. Developers take years to construct buildings before they can generate incomes, manufacturers take time to setup their factory for operation and marketing and selling, etc before they can earn. There is no way around these facts. I am not talking about days, weeks or months of hard work but years or even decades of dedicated and consistent hard work from the entrepreneurs to become successful (Entrepreneurs are grittier than the rest of us). Therefore, it is wise to go long term when investing in stock market.

You can’t produce a baby in one month by getting nine women pregnant. – Warren Buffett

$1 can turn into $2000 by investing in the right business. E.G.: if you bought Public Bank since 1967. This is the power of investing in the right business over long term to generate effortless money. The only thing you need is patience. This also means that you don’t have to be constantly checking the business everyday. Hence, you can have a lot of free time to pursue other life goals that matter to you while investing in stocks. Good businesses will take care of themselves.

Your investment return from stocks is directly related to how much the business is making. It is therefore unrealistic to expect exceptional return from the stock market if the business is losing money. Pick companies that are growing and earning more money year over year is the right way to go. It is relatively easy to pick winning stocks than to start my own winning business.

What is the best time to invest in stock market? The best time to invest is when you have the money. The amount of investment does not need to be big to get started. In fact, it does not matter whether you are poor ($ 100) or extremely rich ($ 100 million), you can still invest in the stock market. It can be the best life time hobby that you can have. A hobby that does not require too much of your attention but is still financially rewarding and fun to do.

The best time to invest is when you have the money. – John Templeton

So, do you have the money to invest in the stock market? Are you ready to make your life and those around you richer? Are you ready to change the world for the better?