Buying a stock or mutual fund is like a driver who is going down the road at high speed, but is using looking in the rearview mirror as a guide. He can see fine out the back, but has no idea what is ahead. Sound familiar?
On the path of life there will be some rain and therefore puddles. Most are shallow and we easily splash through them and occasionally there might be a very deep one. Learning to navigate them will make the journey more pleasant.
Years ago before all the electronic sensors miners would take a canary down into the shaft. He was a very pampered bird as he represented life or death. If he dropped off his perch unconscious the miners ran for the exit as fast as possible. The little guy had detected poison fumes. Yes, they carried the canary out when they left.
If you are the average American investor it means you have no idea what or when you should be buying and selling. Stocks? Bonds? Mutual Funds? Limited partnerships? ETFs (Exchange Trader Funds)? Money Markets?
Investing in long-term financial vehicles give you the most gains but it also puts your funds at greater risk. There is much truth to the saying, “there is no gain if there is no risk”. Still you can reduce your chances of losing your hard earned money, by researching and taking time to understand what you are buying. Would you purchase a house you’ve only just seen on the outside? Both of these are serious investments and you need to arm yourself with the basic knowledge about the subjects.