What Is the Real Essence of Investment?

In today’s world of fast news and numerous trending investments assets, many people forget the real essence of investment.

 

To me, the true purpose of investing is to participate in the long-term positive growth of the global economy, and to let the world’s best companies work hard for you — while you focus on your own goals and values.

 

But does that mean we should just buy any “good company” we see in the headlines?

Unfortunately, no.

 

Buying a stock blindly — without understanding its valuation, business model, or risks — is not investing, it’s gambling. Even if the company has great potential, you may not benefit if you don’t know what you’re buying or how much it’s really worth.

More importantly, many investors underestimate the importance of “emotional resilience” in investing.

 

When markets crash and your portfolio drops 50–80%, panic sets in. If you didn’t prepare your mind and understand your investment’s value, it’s very likely you’ll sell at a loss — the classic mistake of buying high and selling low.

Even worse, emotional investing can damage your family finances and relationships — especially when you put your household savings into something you barely studied, just because someone said it was “a good company.”

 

So, what should we consider when doing investment planning?

It’s not just about picking the right stock or fund. A good investment plan considers:

Your financial goals & time horizon

Your risk tolerance and mental readiness

Asset allocation and diversification

Entry valuation and expected returns

Liquidity and contingency planning

 

We’ll dive deeper into these key elements in our next article. Stay tuned.