Investing cannot guarantee you financial independence unless you make the right choices with your money. This can only be learned through primary knowledge and experience. When becoming an investor and learning where to place your money, you become one of two kinds of investors, the reactive and systematic investors. The article will focus first on the reactive investor.
All investors take their money and purchase stocks, bonds and whichever they need to gain profit and minimize losses. A reactive investor is one who reacts to changes in the stock market quicker than average investors. They have an objective of expanding their wealth by means of taking good advantage of economic situations.
These investors will invest money on gold and other properties when inflation occurs, or when they predict them. They will invest in defensive stocks and bonds as these will increase in yield during economic disasters at the time when the economy returns to normal. Unlike the systematic investor, they will often focus on game, gambling on smaller priced stocks that they expect will return to stability in a short while will raise profit.
The only danger of being a reactive investor is that it is a form of gamble. Even with good financial advice, a reactive investor can lose much money as not all investments can accurately be predicted. However, they learn more mechanisms and factors faster than systematic investors by taking great risks.