If you invest in Sandvik, you need to know their products (mining equipment, titanium, and furnace products) as well as the market for their products. In Sweden, many of the main companies listed on the Stockholm Nasdaq Stock Exchange are in heavy industry or the tech industry. This could be seen as unfortunate for anyone who is no whiz at heavy industry and tech related products and markets. The good news is that there are companies on Stock Exchanges all over the world that operate in all and every kind of business. Do you have a lot of knowledge about Computer Games? Then invest in Angler Gaming. Do you know stuff about Alpine Skiing? Then invest in Skistar. Marijuana? Invest in Aurora Cannabis.
If you invest in crypto currencies, you need to understand blockchain, decentralized ledgers and what SegWit actually means. Yes, the things you need to understand in order to get into crypto trading are very technical and not always easy to understand, which is another reason why investing in this segment is not for everyone.
If you choose to invest in anything, even though you don’t fully understand what you are investing in, be aware that you are then gambling and not investing. Is that what you want, to gamble? If yes, then go for it. If no, inform yourself so you make decisions based on knowledge about what you are investing in.
Warren Buffett, one of the world’s investment super-stars has a great tip for making sure you understand what you are investing in:
“Write down your reasons for investing in a particular stock -Because my bright neighbour said it’s a great investment- is not good enough reason to invest.”
Even though we would like to be know-all super-minds, no one of us is, and that’s ok.
The most successful people anywhere are those who know and accept their knowledge constraints and who listen closely to others who know more than they do. Warren Buffet talks a lot about this, that he doesn’t understand everything and simply doesn’t invest in things he doesn’t understand. He has said:
“It’s a terrible mistake to think you have to have an opinion on everything. You don’t. Invest in what you have a rational opinion on.
Disclaimer: The information in this article, as all content on BlockBull Review, is not and should not be seen as investment advice. The information is for educational and/or entertainment purposes only, so use it at your own risk. It is possible to lose money when engaging in any investment including cryptocurrencies and past performance does not indicate future performance. Any opinions expressed are those of BlockBull Review's writers who are not broker-dealers or advisors of any kind.