Owning Stocks Vs Owning Cryptos
Start Your SIP in Mutual Funds.
In this blog, we will understand the difference between Owning Stocks and Owning Cryptos.
As both are in a limelight these days to the investing world (Oops speculative world). Why Speculative? Because Investors don’t treat Stocks as paper and Cryptos as assets.
Owning Stocks
People are more participating in the stock market compared to previous years, why this is happening? Why every other guy is talking about stocks or making money from the stock market?
Why do they want to know more about stocks and put their money into them? Is it because of Lockdown that they find this stock market world as entertaining as a casino to eliminate their boredom? Well Yes, I feel so.
They look up to Warren Buffett, Ramdeo Agrawal, Radhakishan Damani, Rakesh Jhunjhunwala, Vijay Kedia, and many more highly successful billionaire investors from the stock market.
But what people miss here is that none of these investors treated a stock as paper, none of them got their multi-bagger return from day trading, none of them made 100x by taking 4-5 trading decisions in a day or month.
They became successful because they looked at it as owning a business. Understanding business financials, business potential, acquiring at the right valuation is what they worked on.
They prefer to take 1 decision in a year only after doing their due diligence. Studying everything about a business and its valuations.
After doing all the hard work, then they concluded with the decision whether to own this business or not (they never thought of it as buying this stock or not).
There’s a difference in both mindsets, normally people ask themselves or others, Which Stock to Buy? Now look at this from another perspective, ask yourself whether you should Own this Business or not?
Owning Stock is Owning a Business, Think this way to change your financial life.
Owning Cryptos
Cryptocurrencies are based on blockchain technology, their market cap is increasing at a very rapid and abnormal pace. But the very first question comes up what it actually is? Second, Why it’s increasing without any fundamental metric?
In reality, investors don’t consider it as an asset because it’s actually not an asset. So, don’t consider putting your money into it as an investment.
People are putting their money into it in the name of diversification. That’s not the right justification to put your money into Cryptos.
If you want to put money into Cryptos then treat this like you have entered a casino with some money that you might end up losing all or making 20-30x by the night.
Considering it as an investment or money-making tool and risking your hard-earned money (which you can’t afford to lose all) would be the biggest blunder that you could make.
So, beware of putting money into it. If you want, you can play with it, but only with the amount that you can afford to lose it all. It is a very very very speculative way of making and losing money.
You can gift a business to your kids, but not a Crypto that may or may not have any materialistic value in 20-30 years.
Disclaimer: My views may or may not align with yours, kindly consult your financial advisor before making any investment-related decision.
* * *
If you like this post, please do share it with others, and also Click here to Subscribe to my FREE Email Newsletter.
Hi, I’m Managing Director at Gurpreet Saluja Financial Services where I help my investors to invest in mutual funds and achieve their financial goals. I’m also a Value Investor and here I write about Personal Finance & Investing.
