Question

#10. Discuss why people do not know that investing is a fairly simple concept. Elaborate on why people feel investing is difficult, cumbersome, and often viewed as a taxing and demanding task.  

Answer 1

Investing is a very simple concept. It refers to the process of setting aside money in different assets with the purpose of earning profits. Refers to purchase of assets which are not immediately consumed but used to create and multiply wealth. Concept itself is very simple and refers to the action of purchasing the relevant assets with the extra wealth available with an individual or a business.

However it can be said that investing is simple but not easy. Most people find it difficult due to the various options of assets available for investment. The different assets carry different levels of risk and give different Returns. Moreover there are different options available depending upon the needs and objectives of investment. Matching the portfolio with the risk taking capacity and obtaining the maximum return is what makes investment difficult for most people. It requires continuous and active monitoring for best results. For instance, a person can invest in stocks but they carry high risk and require active management. On the other hand, a person can make a bank deposit which requires less management but gives a very low return. Hence striking the right balance is what makes investment cumbersome.