The meaning of investments

What does investing mean to you? For many, this is a term that they will have been familiar with since childhood. There may have been time spent at home listening to parents or other family members discussing investment decisions.

That’s the type of learning experience that can be surprisingly constructive and useful. Although the imagination may suggest that listening to the odd few pieces of conversation about stock market indices and balance sheets will have had a very limited benefit, that needn’t be so. A child can pick up much, in terms of the language, concepts and even acronyms that are in common use.

But this is not to say that it’s critical to start an investment journey at a young age. It may prove useful to be immersed in a world of business and enterprise in early years, but those who have not received the benefits associated with such knowledge can relax with the understanding that it is possible to play catch up.

Is it possible, however, to learn about investing by using books as a source of information? There are many that would argue that a book can be used to learn about almost any subject and it’s hard to ignore the fact that countless books have been published in this area. When examining titles and summaries, it soon becomes obvious that they cover numerous different topics.

So there is clearly a challenge here to work out where to begin. You know that you want to learn more about investing, but where exactly will you be making a start? Are you planning, for instance, to become a commodities trader? If so, it seems likely that you will be required to pick up some specialist knowledge.

As a starting point, however, it’s undoubtedly important that any budding investor should familiarise themselves with the basic terminology that surrounds finance and investments. Without that thorough grounding, it becomes incredibly difficult to make substantial progress.

Further reading will also prove impossible until you have real confidence in those basic concepts that are under discussion. Good investors haven’t reached the position that they are in via a few lucky decisions (with the possible exception of a few extreme cases). Rather, they have built up the necessary knowledge to enable themselves to make informed decisions. They have done so because there is a recognition that an increased level of knowledge puts them in a much better position. It allows them to take improved decisions on a consistent basis, offering that advantage over other investors.

That may sound like a rather competitive approach and you may feel that you’d rather help others out. It’s important to remember, however, that there is an almost inevitable level of competition to be faced. After all, a successful investor will usually be one who spots opportunities within markets that have been missed by the majority. They are constantly seeking to take advantage of the mistakes of others, looking to build their own positions. On a daily basis, the situation is not quite as extreme as that may sound, but you do need to remember that your own success will rely heavily on an ability to outdo others who are looking to make significant gains.