Why does investing seem so complicated?

The number of ways you can invest is mind boggling. The worst part is that investment world uses a different terminology. If you are new to investing it won’t be long before you encounter words like “accretion, moving averages, amortization, average weighted price, open interest, futures and option, book closure, PE ratio, top line , bottom line, gross profit, net profit, bonus, dividend” etc. Let me stop before I put you to sleep. All you really want to do is to put your money in something where it will be safe and grow. Is that too much to ask for?

Why are there so many different investing alternatives?

Are they really different! If you have ever been to a grocery store you will see boxes of different detergents, most of which will be labeled “new!” “Improved!” or even better “New and Improved!” But no matter what they call it, when its all said and done these boxes are filled with nothing more than SOAP, same as they have always been.

Investments are no different. At first glance it may appear that all these mutual funds, unit trust, REIT’s, options, futures, stocks, shares, bonds are unique and require encyclopedic knowledge to understand the technicalities. But more often than not what you are looking at is nothing more than just an old way of investing in a new box.

Understanding investing in simple terms:

 In a family tree you will have a male and a female at top of the list from where all the other branches came out. Similarly in investments at the top you have stock and bond. All other forms of investments are some form or other of these two. And their differences can be spotted just as easily as you can distinguish a man from a woman.