Daily Money Minute

Fotolia_54867638_XS_7“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” ~Paul Samuelson

The key to investment success is buying quality companies at the right price and then being very, very patient. As I’ve said before, it is not about timing the market; it is all about time in the market. There is a big difference between speculation and investment. Speculation works on the greater fool principle. You buy an asset in the hope that you can sell it quickly for a higher price to a greater fool. Professionals have been known to make money this way but essentially it is gambling and most people will lose far make than they will ever make. It is much better to purchase stocks and shares in well-managed companies with great products. Purchasing stocks and shares at value for money prices is the basis of good investment. A stock should be paying solid and sustainable dividends and you should be prepared to hold it for the long term. Reinvest your dividends and don’t be panicked into selling by short term volatility. Markets will always go up and down but as long as your dividends provide you with a good income stream, volatility is nothing more than a potential buy opportunity. Buy at the right price and reinvest dividends and you should enjoy long term capital growth. Always think investment rather than speculation. Speculation can be a weapon of mass wealth destruction.

© Roy Sutton and Mann Island Media Limited 2013. All Rights Reserved.

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