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When I was about 14 years old, the first version of the Wall Street movie was released in 1987. I think all of us who saw it automatically left with the illusion that the way to become a millionaire was to bet and investing in the stock market. values, just like Michael Douglas and Charlie Sheen did in their characters.
After more than 30 years of investing in the stock market:
History has not changed at all, people sometimes ask me, are you a financial advisor, right? and they tell me I’m also betting on the stock market. Which I automatically respond to and what makes you think I bet? In my case, I invest and people respond well if it’s the same.
And the great truth is that investing and betting are not the same thing at all, but there are very few who see the difference and the line between the two concepts becomes more and more blurred for many.
The invasion of investing as Traders:
The quarantine forced many people to stay locked up in their homes, and a word appeared that the vast majority did not know, but overnight, almost all my neighbors and friends were TRADERS and now they were dedicated to buying and selling shares , options or crypto-assets. Being the way to become a Trader very simple, you only need to do a two-week course and that’s it, a new Trader has been born, now you only had to take your money and start playing and the best of all is that thanks to this course you would be millionaire. Although in my opinion it is that he really became a millionaire was the one who sold the courses so that you could be a Trader.
An expert is born
There is no better way to feel like an expert in something if the first time you do it it goes well, with which many think that they were born for that and even feel that they have the magic recipe to feel when the market will go up or down, and if in At some point you will run out of ideas on how to invest, very easily you enter social networks and you will see the so-called Finfluencers (Influencers but who give financial tips) and they will tell you how to become a millionaire in a short time.
To which all the professionals that we have, as in my case, two postgraduate degrees, undergraduate studies, consulting licenses and a certification in financial planning, say: I studied so much and worked for so many years on this and it was so simple, I had it! to take that 2-week course and voila! But the reality is that even Warren Buffett himself has said that they are not as simple as it seems, and that is that since the fall of March 2020, investors have not experienced a significant fall in the market, but that does not mean that they will not come, since that is the natural thing the markets go up and down.
Short-term vs long-term view
The securities markets are characterized by the following in the very short term, for example within a day the markets can behave randomly and may have the behavior of a casino, that is why those who are dedicated to the purchase and sale of actions on the same day (daytrading), come to suffer, like gamblers, the illusion of the forecast and just like someone who tries to guess the weather for tomorrow, they feel that when they succeed they can control it.
It really is: a group of companies that strives every day to create value for their customers and shareholders, developing new products or services to satisfy their customers, trying to be better than their competitors and being a perfect place for those who don’t make it. are disappearing.
Then it is precisely when you change your investment horizon from the short term to the long term, where you get on that path of prosperity that the shares or bonds issued by those companies are creating and where over the years these investments have given good results, being totally different from a casino where rather while you play longer the Casino has more chance to win and you to lose.
Remember no one can hit the winning horse continuously, much less in the long run.