What is Investing?
In the words of Benjamin Graham investment activity is defined as mentioned below:
“An investment operation is one that, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”
These can be classified as follows:
Investing entails ample efforts in terms of research andperceptive the investment options available, formatting their appropriateness for the wants of the investors and their appropriate value.
Investing is not a one-time activity, but one that involves regular tracking, monitoring and appropriate changes to the investment resolution based on new set of information and consideration.
The activities linked with investments must be embarked on in a well-organized and methodical way
Buying shares of a company is alike to taking part ownership in abusiness. unquestionably, buying a business fully or partly is substitute to starting a business and would command same kind of research analysis as would be necessary when taking into account to start a business on a range ofmagnitude of the business – product, customers, inputs, outputs, bargain power of business vis-a-vis other external parties such as suppliers, customers and others, competition, regulatory environment, potential opportunities, threats.
Protection of Investment– The primarypurpose in investing has to be looked after theinvestment value for which it is significant to spot opportunities that offer a margin of safety (MOS).
In investments, this indicates investing in opportunities available at prices lowerthan their supposed value.
With strong research and monitoring, an investment portfolio should be able to defend the investor’s investment value over anappropriate investment horizon, regardless of short-term fluctuations in the market.
Sufficient return–It would most likelymean risk adjusted return in contrast to other challengingopportunities for invested capital.
It is significant to understand the risk and return features of an investment before carrying it out. Investors that follow the above system of belief are said to be occupied in investing. Subsequent are the leanings for frequent investors from this definition of investing.