Gambling versus Investing: Do You Know What You Own? - By Branden Côté

Jennifer Hester |


Immediate gratification has become the norm in our present-day economy, where individuals seek to predominately profit from the market only to be satisfied by the highest returns. Unfortunately, this is far from the underlying principle of investing. Historically, at its core, the principle for investing is ownership. This ownership occurs by investors providing capital to businesses and corporations to be utilized at the discretion of the underlying corporations. Those investors of these corporations should then be able to provide the degree of productive utilization of capital by these corporations in which they have invested. Consequently, this doesn’t always strike confidence in an investors conscience. This insinuates a higher participation rate of gambling than investing has occurred.

Put more eloquently, “If you don't understand your investment on a fundamental, business level, then you're not actually investing at all. You’re gambling. Worse yet, you’re gambling blind.” To Lynch’s point, ownership implies a certain level of responsibility & research to be upheld. This may seem apparent to lion’s share of Americans who understand what they own in their portfolios, but unfortunately not the case to the lesser who have not done their due diligence.

Mitigating this tragedy can begin with the realization that investing is not speculation, but is ownership. Ownership infers a personal responsibility to what is now an asset. So, it would make sense to know what that asset is. Becoming part of or remaining portion of the investors who accomplish this is done by utilizing the greatest asset, time. Utilizing the time to develop proper perspectives such as:

• Understand the fundamental facts of investing
• Know your overall goal & what is needed to get there
• Commit to the long term, not short-term market profit
• Make it personal. Uphold your decision with personal conviction

These are worthwhile instruments for competent investing. As a result, this enables any consequent steps towards asset management to become more confident & focused. You owe it to yourself to invest the time, not waste it. Need to have a discussion about your investments? Give us a call!