Friday, 27 February 2015

Worrying is essentially a waste of time

Economic problems are similar to the influenza virus that marks the arrival of winter every year. Exaggerated concern seldom improves anything. Instead, individuals should identify the path that minimizes trouble and, if possible, find ways to profit from it.

Incomplete information 

Whenever you hear that inflation or deflation are coming, ask yourself how you can structure your finances in order to benefit from the situation. Can you link your income to a product whose price is likely to increase or decrease at the same pace as the overall economy? Can you reduce the amount of cash that you require to live and invest the remainder in assets that will profit from upcoming economic changes?

Economists speculate all the time about next year's rates of unemployment, inflation or deflation. For your personal investment decisions, you don't need to wait until the exact figure is known. On most occasions, knowing the general trend is enough to make rational investment choices.

If newspapers are discussing whether next year's inflation is going to be 6% or 7%, that tells you as much as you need to know. Take swift action and reflect about how to structure your finances to deal with such price increases. Worrying is essentially a waste of time. Although you cannot reshape the world according to your taste, nothing prevents you from taking measures to minimize trouble. 


Risk diversification

Discard stress, anxiety, and depression, learn to face problems in the best possible way, and become a rational investor. Your financial and philosophical sharpness will grow together. Your personal effectiveness will increase and you will become more tolerant and self-reliant.

Stop worrying, take action, and start making money. Never place all your savings on a single investment. If you acquire the habit of diversifying your investments amongst different types of assets, chances are that you will be much less troubled. If you purchase shares of solid companies around the world, your portfolio will tend to be less affected by problems in specific countries.

Learning to deal with the world's problems is a better approach than being paralysed by them. Wisdom is the process of learning what a man can achieve and what he should rather let go of. Becoming a rational investor will make you a better human being and help you overcome whatever financial fears the day may bring.  


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Text: http://johnvespasian.blogspot.com

Image by Marshall Flickman under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us

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