Running Head: THE THREE PILLARS OF INVESTMENT
The Three Pillars of Investment
Reading and Writing
THE THREE PILLARS OF INVESTMENT
Investment is an art, a not simple, not easy, and not safe practice that can be cataloged as an art. Like all great forms or art, investment is something that many people has misconceived, and has tried to reproduce, but has failed at it most of the times. In order to not fail at it, you first need to understand what its foundation is.
We will explain briefly, but in depth, how to understand the basics of investment. This will be accomplished just by understanding which the three pillars of investment are, and here we will know them, describe them, and learn how to invest on each of them. We will also know about the very concept upon which all investors should rely on; diversifying. Our topics of interest are:
1. Knowing the three pillars.
2. The pillar of stocks and bonds.
3. The pillar of real estate.
4. The pillar of small business.
5. Diversifying for the win!
The review of the basics of investment focuses on these areas.
KNOWING THE THREE PILLARS
The whole world of property investing rests upon three totally different pillars; the pillar of stocks and bonds, the pillar of real estate, and the pillar of small business. All three have different concepts, requirements, and expectations. However, all three share the same objective; make money work for you, so you can make money out of money and not out of working for somebody else.
The Pillar of Stocks and Bonds
Stocks and bonds is a world of risks, but of high profits too. This is a very unpredictable world too, which can also be described as merciless for the investor. No matter who you are or what you do, if you decide to get in the world of stocks and bonds you never come aboard being certain of wining.
Stocks and bonds concepts, requirements, and expectations. To define stocks and bonds we need to manage two different concepts. This is because although this is a one single pillar, there are two ways of interacting and participating when investing here, and the first is with stocks.
???A stock (also known as equity or a share) is a portion of the ownership of a corporation??? (Mike Moffatt, n.d., para. 1) when a bond is ???a debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing??? (InvestorWords.com, n.d., para. 1). In other words stocks give you ownership of some of the company and bonds are just a promise to re pay your money.
In order to enter the marvelous world of stocks and bonds you need to have cash or money to invest. However all of the investors in the stocks and bonds market never invest on themselves,