Roberto Anzellotti @IlMatematico: "FLASH COURSE IN INVESTMENTS In one..."

Italy

FLASH COURSE IN INVESTMENTS In one post, the key elements of the world of investments. Let's get started! ✅ TIME is the key element of finance and economics. ✅ Exchanging Time for Money is what is called "work". Generally speaking, the more skills you have, the more you can ask for money in exchange for your time. The more you are able to increase the profitability of the place where you work, the more you can ask for money in exchange for your time. ✅ Exposing your savings to risk can pay off. Depending on the risk taken and the period in which you expose your money to risk, you can ask for a higher remuneration. ✅ The main objective of those who use their money so that it can be remunerated is to maximize the remuneration by trying to take the minimum risk. Long times help reduce risk. A risk-free RATE OF RETURN is the return you assume you can get without your capital running risks and is usually considered equal to US Treasury bond rates. Any risky investment should have a return higher than this rate, as compensation for the greater risk taken, because otherwise it would be better to invest in the risk-free investment. ✅ TRADING is a zero-sum game, where you expose your capital to high risk for SHORT periods of time, in exchange for high returns. In trading, for every person who earns a dollar there is one (or more) who loses more than 1 (1 dollar earned by someone else, plus the commissions earned by the broker). ✅ INVESTING is the concession of one's own capital to third parties for LONG periods of time, so that this capital is used to produce income and wealth, with the aim of participating in the division of the profits produced, which occurs either through the increase in the value of one's share or through the distribution of a dividend. ✅ INVESTING is not a zero-sum game, but on average, over the VERY LONG term, it has IN THE PAST proven to offer a return of around 6-10% per year. In general, the performance of the S&P 500 index is considered as a benchmark, which is the abbreviation of Standard & Poor's 500, a stock index that reflects the performance of the 500 largest companies listed on the stock exchange in the United States. ✅ You can INVEST in just one company or in a limited number of companies by purchasing their shares. This is considered risky because it ties the investment performance to these companies. It could go very well, it could go very badly or it could simply go like the average of the rest of the market (in this case you are exposed to an unnecessary risk and therefore you can say that the investment was not excellent). ✅ You can reduce risk by INVESTING in the market as a whole through instruments that replicate the composition of the entire market (ETF). In this case you expect that the return on your investment will be similar to the market return. ✅ There are private investment funds that, in exchange for higher commissions than ETFs, promise to have higher performances than ETFs. Typically, this can happen for short periods of time, but is unlikely to happen over the long term. ✅ What limits the performance of investment funds in the long term is the need to do well every year (to retain inexperienced clients who would flee at the first red light) which prevents long-term planning, the size of the fund (which when it is too big, it cannot invest in small companies that are growing), and the importance of commissions that eat up a large part of the most profitable products year after year. ✅ A few sufficiently expert individual investors manage to outperform the reference indices and even beat investment funds, thanks to the fact that they do not have the limitations of large funds. These investors try to select opportunities that give a higher return than the market, trying to minimize the greater risk to which they are exposed. ✅ Thanks to ETORO COPYTRADING, even if you are not sufficiently expert, you can activate an automatic copy of more expert investors, in order to replicate their operations, thus exposing yourself to higher risks than the benchmark but also to higher returns. ✅ If you are interested in COPYTRADING it is essential to carefully select the investors to copy. eToro already does an initial screening by selecting some and identifying them as POPULAR INVESTOR, but you still have to pay close attention to their selection by looking for people with a track record of many years and whose work seems to you to be of quality. Remember that past performance is a good yardstick, but it is not guaranteed to be repeated. ✅ Thanks to eToro social trading, you can also learn a lot by following posts from top investors. You can follow the best investors and their posts even without needing to invest with them, you can simply put them in your followers and read what they write. I'm @IlMatematico , add me to your watchlist to remain updated on all my posts and on all my movements on Stocks in the $SPX500, $NSDQ100, $BTC & the crypto world!

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