Do you want to own a part of a great company or are you a speculator? Owners think long term; they analyze a company before any stock in the company. They study the business model and financial statements before investing in the company. They want to earn passive income from dividends and possibly reinvest the dividends to create their financial freedom. If you are looking for short term gains from stock price fluctuations, then you are a speculator. Remember, it is your hard earned money; you deserve to let the money work for you. This is true financial freedom. In the stock market this can be achieved only through long term investing for dividends.
Stocks give you ownership of a business. You are the owner. Every decision you make regarding your personal life is always in regards for the long term benefit, then why not the same mentality for stock investment. This should be your fundamental principle in stock market investing. When you buy a stock you are buying a part of a company. Buying stocks and not realizing that stocks are actually a part of the business is the fundamental mistake most speculators make, thinking that they are investing. True investors always invest in dividend paying companies so they can earn passive income. Speculators only want quick capital gains; this is how speculators get burned in the stock market.
An investor understands how the company makes money, protects themselves from losses by investing in companies when they are undervalued, ignores the media noise, think that he is buying ownership in a company; if you had enough money to buy the entire company, would you? If not, you should not even consider buying a single share.
On the other hand, speculators buys stocks because a friend gave ?hot? tip or without doing any research leading to lack of knowledge of the company you are buying, because you believe can get lucky and make some quick money or because everyone else is buying those stocks.
Stock market investing has its advantages. After analyzing the companies, you are free to choose which company you want to invest and be an owner. You can choose to cash out any time and switch to a better company because all the decisions are yours to make. Ownership gives you lots of advantages, the best being getting dividends and reinvesting them to build your financial freedom. You invest only when you want. Once you complete your analysis of the company you can spend your time as you like, especially after achieving financial freedom. Your company will grow the money you invested in it.
In conclusion, avoid being a speculator who thinks he is investing but actually is playing the stock market and hoping he will be lucky to earn quick gains. Become an investor who analyzes companies before investing because he wants to become a long term owner of the company so he can achieve financial freedom from dividends he receives and reinvesting the dividends.
Source: http://dividendpaying-stocks.net/dividend-stocks-invest-like-an-owner-not-like-a-speculator/
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