Subject: IC940630: Why Investing ?

From: "Gray Zhu, 800-289-2498, 212-279-6700" <[email-masked]>
Date: Thu, 30 Jun 94 22:42:13 CDT

==================    IC940630: Investment Club  ======================

Why Investing ? .............................................. Gray Zhu
	1. investing is diversifying your money
	2. investing make you money
	3. investing to prepare your kids education and your retirement
	4. investing is part of American culture
_______________________________________________________________________
   (be sure to read the Disclaimer in the end if you have not read)

(Yesterday, I gave a short seminar to a group of friends. I addressed
3 points: why invest, where to invest, when to invest. Here I am
posting my view on the "WHY". The market has been down a bit, do not
miss the independent day stocks "ON-SALE" opportunity. - I am glad to
hear other opinions.)

Why investing:

1. generally, people think put money into a CD is safe. I do not think
so: the "safe" means there is no market risk, or it is not subject to
market fluctuation. although CD is not an investment (does it
matter?), but it faces the so-called purchasing power risk instead of
market risk. Currently, the 5-year CD interest is about 6%, if the
inflation goes to 10% in the future, you are losing 4% instead of
making 6% considering puchasing power.

On the other hand, stock market generally rides above inflation, you
dont have much purchasing power risk, but there is market risk.

Of course, bonds share the same problem with CD, but that's why a well
diversified portfolio should consider both stocks and bonds.

2. investing make you money

Someone asked me a very interesting question: if one investor made
money, is it correct that another must have lost the same amount of
money? The answer is NO. let's assume an ideal situation where a stock
keeps going up without fluctuation, everyone who invests makes money
because he can always "buy low, sell high". The money come from the
increased total amount of money invested in the stock. - think about
it.

If you still don't understand, let me ask you a question: you work for
a company, and your salary is raised, does it mean another fellow's
salary is lowered? why?

Fact is, the odd of winning is greater than 0.5 in generally - this is
different from the casino gambling. you know, the average annual
return in the stock market is about 10% over the last 60 years, 12%
over the last 30 years, 17% in the 80's.  Again, you know, assume 12%
annual growth, a $2000 investment will become $60,000 after 30 years
if you reinvest all the returns.

3. investing to prepare your kids education and your retirement

People invest for their kids, their own retirements - The benefit is
described above. If you invest a couple of thousands for your kids
when their young, you are going to make them tuition with no
significant impact on your budget when you need to pay tuition. you
can figure it out.

4. investing is part of American culture

Most American middle class and above have investments, and they have
been doing so from generation to generation. If you have some
investments in the market, doesn't it make you have more in common
with your American friends? TV and radio broadcasts the market every
day, if you have no idea about what it is about, dont you feel you are
missing something in your life?

With investments in the market, it is very likely you are aware of the
big news events, what is bad about it?

If you do make some money or even lose money, you should feel more
excitements than those who stay in the lab all the time.

==========================================================================

                           Disclaimers:

 a) Material on ICnet  is for general information only, and made available
    to  voluntary  subscribers  (subscription  is  free).    There  is  no
    guarantee of  accuracy in either text or numbers, so please read  with
    your own discretion.  Opinion expressed by any author is  his own, not
    necessarily  his  employer's.  Nobody on  the icnet-l or related (Hong
    Guang, Gray Zhu or their employers, or any other members, or ifcss.org
    which is the  ftp provider) except yourself assumes any responsibility
    for any consequences of using the material.

 b) You are free to forward and copy the material  for private use. If you
    do forward, it is mandatory to let it ALWAYS GO  WITH DISCLAIMER.  Use 
    of the material for commercial  purpose without written consent of the 
    author is prohibited.

 c) Any past  performance examples should not be  considered an indication
    of future results.

==========================================================================
    Any VIP related message should be addressed to: [email-masked]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                  ICnet - Investment Club on network
__________________________________________________________________________
  SUB/SIGNOFF to: [email-masked], with mailbody as:
                  SUB ICNET-L Firstname Lastname or: SIGNOFF ICNET-L
  Post mail to:   [email-masked]
  Anonymous ftp:  at ifcss.org, in direcctory: /org/icnet
  Gopher:         /org/icnet on ifcss.org, /ifcss/org/icnet on cnd.org
  Managers:       Guang Hong, [email-masked]
                  Gray Zhu, [email-masked] (800)-289-2498
__________________________________________________________________________
     ALL INVESTMENTS INVOLVE RISK, STUDY CAREFULLY BEFORE INVESTING.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~