Question

What was your attitude about investments before and after you read the chapter on investments?

Answer 1

Attitude BEFORE reading chapter on investments:

1. Casual attitude - Prior to the chapter it is perceived that investment is simply putting your money in financial or physical assets and when take the money out, it comes out in multiples.

2. Micro Minded - Investment is initially seen from just an individual perspective in way that it can affect or be affected by individual only.

3. Its just about numbers - Before reading the chapter on investment, it only matters that how much the number has increased or decreased. There is no concern about what affected it.

4. Singular - Investment by itself seemed to be a singular term. there is nothing complicated about it. it has simple variables which can be calculated.

5. Return on investment - Initially the focus is solely on returns on investment. That itself was a deciding factor.

Attitude AFTER reading the chapter on investments:

1. More scientific in approach than just judgemental: The awareness about investments and their process calls for a need to be more systematic approach rather than casual approach.

2. Macro Minded - In reality there are many factors external in nature that impact the investments which needs to be taken in account. There is a transition from micro to macro level thinking.

3. Significance of Qualitative factors - Numbers are one form of representation. They can act as a degree of comparison but factors which cannot be quantified like attitudes, shifts in policies and many more are taken into consideration after glancing through the investment topic.

4. Diversification and complication - Investments are classified in classes of assets and the degree of complications rise with the number of assets taken into account.

5. Cost as well as Return on Investment - Return is just one face of the coin. the other one is the cost of acquiring it. it gives rise to the topic of "Value Investment".

6. Risk Factor - Investment is prone to risk. Credit Risk, Default Risk, Sovereign Risk and so on. Investments needs to be checked from return and risk filters as well.