Investing Success Depends on You

Posted: June 8, 2012 at 3:19 am


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By Andrs Cardenal - June 7, 2012 | Tickers: AAPL, BRK-B, BRK-A, FB, GS | 0 Comments

Andrs is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.

The investors chief problem -- and even his worst enemy -- is likely to be himself.

Ben Graham

Its not recessions, unscrupulous bankers or even nontransparent business practices what should concern investors the most. The biggest threat to your financial well being, my friend, is no other than yourself.

Fortunately, not only for their mistakes are investors responsible, the same goes for making the right decisions and choosing the best companies to invest in. Contrary to generalized opinion, I believe there has never been a more interesting time to be an investor. For better or for worse, investors have now much more possibilities and flexibility to implement their strategies.

Information has never been so abundant and easy to access as it is nowadays, education about personal finance and investing is widely available for those interested in the topic and willing to do the learning effort. You can access financial statements, recommendations and all kind of relevant news about companies in almost no time and no cost.

The technological revolution has also created many companies which have a tremendous potential to reward investors in an extraordinary way over the long term. Apple (NASDAQ: AAPL) for example is the biggest company in the world, and last quarter the company reported a 88% unit sales increase in iPhone and 151% increase in sales of iPads, which produced a 94% growth in net income versus the same quarter of the previous year. If the Cupertino giant wasnt such an innovative company making the best use of technological advancements, those kinds of growth rates would be impossible for companies of this size.

The other side of the equation regarding the effects of new technologies on our investments would be the danger of investing in companies like Facebook (NASDAQ: FB), but nobody was forced to do so. Those who paid a stratospheric price for shares of a social network only because they knew it was popular made a huge mistake, but it was their own mistake. Who knows, maybe the company will find a more sustainable way to generate profits, and with more than 900 million users this could still be an opportunity in the future, especially if bought at much lower levels.

Its not only about technology, of course, considering our current environment is quite shaky and uncertain regarding global economic conditions. Times have been much better in terms of economic growth in the past, and there are many structural problems in developed countries which need to be fixed. This will probably generate higher levels of volatility and uncertainty in the future, but that also brings opportunity.

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Investing Success Depends on You

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June 8th, 2012 at 3:19 am

Posted in Personal Success