I can’t believe someone even asked us “Which best describes an investor’s primary goal?”
It could have been a competitor who knew it would get me going.
Hell, it could have been anyone who knows me. Anyone who knows me knows that this question would set me off…
But we are staying true to ourselves and answering as many client and reader emails as we can…
And writing content about them as we feel if one person needs something answered then it is likely someone else would benefit from hearing the answer to those questions. Plus, it seems like from the positive feedback we are getting from readers they enjoy these specific types of posts where we answer reader emails to the public.
Here we go. The answer to the question “Which best describes an investor’s primary goal?”
Which Best Describes an Investor’s Primary Goal?
Great. Nice video by whoever.
Wall Street and financial media will tell you there are a lot of goals in investing. Some people want to invest to help others, some people want to invest in order to donate the proceeds to charity or to causes, while some people invest because they just love to do so.
Deep down, none of these are the primary goals in investing. The primary goal, and if someone tells you and different they are lying, is to make money. And not just to make money, but make every single penny they possibly can within their risk tolerance. And again, I don’t want to sound like a broken record, but anyone who says that their primary goal is not to make as much money as possible is lying to you.
Some people do not any levels of risk and if they were to see their account down any more than $5 in a day they would lose their minds. There is nothing wrong with this as there are investment strategies for these types of people. Buying bonds is an example of an investment strategy that would fit well for the risk profile of these individuals. But when offer a bond that yields 2% and a bond that yields 3%, these people will always take the bond that yields 3% as long as it has the same maturity and risk as the bond yielding 2%.
This the premise that Stony Brook Securities was founded off of. Wall Street will market a great deal to as many people as possible in order to gather their assets and charge them fees. This is the business model of Wall Street.
These funds will tell people “We invest in the market to help people accomplish their goals in a blah blah blah give me a break whatever you were going to end up saying”.
Which best describes an investor’s primary goal? Simple. When a good stock is on its low end of the range…we buy it. Why? Because we want to make money! A stock is on the high end of the range and we feel like it is overbought. What do we do? Sell it! Why? Because we want to make money!
Now, obviously, we aren’t cowboying up all day every day here. We have to stay within ourselves and not get too big. The risk has to be not as large as the reward in all of our investment choices. While this is true, I still do not care what anyone else says. The primary goal of investing is to make money!