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Why is investing so confusing?
We get so involved in the nitty gritty of things that we miss out on the simple bigger picture. Let us take   the concept of "Investing". Why is investing so confusing and misunderstood? At the outset, the most   common misconception people have is that the term "investing" only involves investing of money.
 
People fail to realise that they are indulging in investing at every stage in their life. Also, what most   people call investing is not really investing. People are all talking about different things yet they often   think that they are talking about the same thing.
 
A few categories of "Investing" include:
 
  1. Having a large family
    This may seem strange, but many people, (especially from the poorer strata of society) believe that   more bodies mean more income for the family and hence having a large family makes economic sense.   In more well-off sections also,couples believe in having children in the hope that at least one of them   may take care of them in their old age

  2. Education
    This is certainly an investment. Some recognise it as such, while others are ignorant about it. It involves   outlays of time and money. People spend nearly two decades of their life in the pursuit of formal   education in the hope that this will aid in securing the rest of their lives.
    While its importance (expecially amongst the middle class) cannot be understimated, people must be clear that education is only a tool which will aid in securing your future and not and end in itself.

  3. Investment in assets
    Many people invest in hard assets such as gold, silver, real estate, as well as in financial assets like quity shares and bonds. This is also the most widely accepted definition of investing.
    There are different "Investment Products" like stocks, bonds, mutual funds, real estate, insurance, commodities, precious metals etc. Each is designed to do something different and that is another reason why the subject of investing become more confusing.
    And then there are different "Investment Procedures". These are nothing but a technique, method or a formula for buying, sellilng, trading or holding the investment products.

  4. The following are the different investment procedures:
    Buy,  hold and wait (Going long)
    Buy and sell (Trading)
    Sell and then buy (Short Selling)
    Options (Trading)
    Broking (No personal trading positions, but investing in the business) etc
 
Investors are classified by their procedurs and their products. You have a stock trader, a real estate speculator, collector of rare coins, commodity futures trader, a day trader, and a saver who is happy putting his mony in a bank. These are all examples of different type of investors who are known by their product specialties and the procedure adopted by them. All this adds to the confusion on the subject of investing because under the banner of investing we have people who are really gamblers, speculators, traders, savers, dreamers, and ... losers.
 
Investing is also confusing because it is a very vast subject. If we look around us we will se that people have invested in many different things. Look at the appliances we use. They are produced by companies in which someone has invested in. The electricity we use is produced by a utility company where someone has invested in. Look at the car we drive, the soft drinks we consume, the cloathes we wear, the furniture, the airplane etc. Alll these things are there because someone invested in the business that delivers these products. This is what investing is all about
 
 
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