Stocks and Their Returns

Starting out, every aspiring investor may simply want to make money. That is perhaps why so many people end up trading (hour-by-hour or day-to-day), caring only about a capital gain or a bonus dividend return. A handful out of many will actually consider longer term investing, and even then the emphasis is on understanding how their capital can gain or lose without a short period of time?

(After all, people have to eat, obtain a car, and pay for the mortage or rental to the home. Very few have the time or patience to consider longer term investing.)

But irrespective of the length of the time horizon predetermined to be required for investing, and the size of the portfolio involved, the investor soon realises that there is more to investing than simply a ticker symbol and an ownership of a piece of paper.

People and Business

Instead of fixating on the money, an investor soon learns to appreciate that the businesses they invest in and own comprise a multitude of people doing their jobs. There is a wealth of information to be obtained every day from meeting and speaking with various people in your everyday life, about the business they are involved in.

Who are their competitors, suppliers, customers and employees? How is the relationship with the government?

For a book that includes how to decipher information from people involved in the target company which you may be interested in, Warren Buffett says that part of his investment approach involves Philip A Fisher - Common Stocks and Uncommon Profits. You may benefit from reading this recommended book.

Book and Forum

For a copy of the abovementioned book, do click here.

To discuss the contents of the book, do feel free to leave a comment in the forum section below. Feel free to leave a question or like as well!