RADIO SHOW/AUDIO PODCAST
Solutions...with Courtney Anderson! (SwCA)
Episode 237 -
Originally aired 12/17/2014 9:00 AM -
FINANCIAL FIERCENESS! series -
“Do Not Invest In Anything That You Do Not Fully Understand.”
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Solutions...with Courtney Anderson! (SwCA) has tens of thousands of downloads in over 40 countries and is growing! This is one of the fastest-growing global business podcasts! I am host Courtney E. Anderson and I have been featured as a business and legal expert for numerous media outlets including BusinessWeek, CNN - HLN, Cosmopolitan, MSNBC, USA Today, FOX News, CNN International, The Wall Street Journal and many more...
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TALK SHOW EPISODE NOTES
Our FINANCIAL FIERCENESS!™ series integrates our financial goals into our development plan for surpassing our goals. We deal with the specific issues we need to explore in order to achieve (and surpass) our financial goals.
This episode is, “Do Not Invest In Anything That You Do Not Fully Understand.”
In this show we discuss A Stone* of Solutions™ including:
1. Revisit our show: “Why The Smartest Thing You Can Say Is, 'I Don't Know.'” RADIO SHOW/AUDIO PODCAST
Solutions...with Courtney Anderson! (SwCA)
Episode 154 - Originally aired 7/25/2014 9:00 AM - MYTH WARRIORS series
2. Investing is a prudent part of your financial independence/ autonomy plan.
3. Bad investments (e.g., you put your money in and nothing came back out) have financially ruined many people and organizations.
4. The challenge is what should you invest in?
5. There are a dizzying array of choices.
6. Real estate? REITs? Stocks? Domestic or International? Bonds? Minerals? Futures? Air rights on Mars?
What does all of this even mean?
7."Scam artists read the headlines, too. Often, they’ll use a highly publicized news item to lure potential investors and make their “opportunity” sound more legitimate. The SEC recommends that you ask questions and check out the answers with an unbiased source before you invest." (United States Securities and Exchange Commission)
8. "Peter Lynch, the legendary portfolio manager from Fidelity, is famous for offering the advice, "invest in what you know.”" (US News & World Reports)
9. Would you buy anything at the grocery store that you did not understand? No. It is the same with these items.
10. Ask the following questions to begin to understand the basics, Who? What? When? Where? How? Why?
11. “Never invest in a stock. Invest in a business instead. And invest in a business you understand. In other words, before investing in a company, you should know what business the company is in.” (The Economic Times, The Times of India)
12. Con artists/scam artists/white collar criminals (why do we call these criminals artists?) prey on the fear of "not knowing" and also the lure of insatiable greed.
13. No one knows everything. No one who is greedy will ever have enough. This combination is what results in bad outcomes due to bad investments.
Should you invest in a car wash in Alaska? A chain of dance clubs in Norway? Residential rental properties in Iceland? Commercial strip centers in Yakima, Washington, USA? How do you know?
14. " Warren Buffett, probably the greatest investor of all time, offers similar advice: Invest in businesses you understand. These sentiments may seem trite, but it's amazing how easy it easy to get sucked in to a hot tip, a "sure thing," and a great story, only to realize that you still don't really understand what drives a company's profits. The more you know about a company's--or industry's--underlying economics, the more solid footing you're on when analyzing its prospects. " (Morningstar)
BONUS: Be realistic. If you do not have any tolerance for risk, do not take any additional risk. "Even company insiders buy and sell at the wrong times. Which is a way of pointing out that nobody really understands their investments. We like the illusion that it’s possible, but truly the only way to know is to own enough of a company’s shares to control the majority of board seats and install your own CEO." (Forbes)
We will never know everything about what we invest in, yet we will lower our overall probability of financial catastrophe with due diligence and a healthy and realistic approach to investing for our current lifestyle and our future!
*A stone is unit of measure equaling 14 pounds (so we have 14 elements in our one stone of solutions!).
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