DATE
Levels
Categories
There are two ways to make profits in the financial markets:
For an inexperienced investor, even for advanced or professional investors, it is difficult to know when is the best time to enter the market to buy and even more difficult to know when is the best time to sell, especially when there is a lot of uncertainty in the financial markets.
Trying to seek short term profits from our investments only through Market Timing is very complicated even for a professional investor.
The opposite strategy of buying and selling securities seeking short term profits based on the movements in its price, is to buy financial assets and hold them and analyse the results of our asset selection strategy after a certain period of time (buy and hold).
Selecting the best assets for our investment is the most important task and the one that brings the most value.
Buying assets solely on the basis of their expected return.
This way of constructing a portfolio, common among inexperienced investors, can lead you to have an aggregate of assets and not a portfolio. More worrisome is not knowing the overall risk you are bearing in your investments and that the resulting risk is one you are unable or unwilling to assume.
Did you like it? Share with your friends: