Investment Vehicles

Different people have different needs and different investment goals. Hence Investment plans may vary from person to person. For Ex: Why do we have so many different type of cars and trucks? Because different people have different needs. A farmer would find the Tata Sumo useful at his village, while people staying in the city would prefer any other luxuroius car for his purpose. In the same way in the Investment world , different investment products are called Investment Vehicles. Say, a person from Mumbai has to go to hotel in Kolkata, he would use a train or a car or abus to reach there. On reaching Kolkata, to go to his hotel he would chose a bicycle, a taxi, a bus or a rickshaw. Similarly, when one has an investment plan in place one can choose one or more investment vehicles according to their needs and means.

Trading is Not Investing

We find so many people focusing on a product, say stocks and a procedure, trading, but they do not have an investment plan in a place. Most people are trying to make byy what they think is Investing. But trading is not investing, it is only a procedure or technique. We come across a lot of youngsters today who when asked what they do for a living, proudly answer that their business is Investing. They go early to a broker's office when the markets open and remain there till evening. All day they buy and sell stocks. They believe that they are investing but what they actually do is Trading. This is the new breed of traders known as day traders.
There is nothing wrong with trading; these traders also play their part in bringing liquidity to the Markets. Its only when people are not clear about thier own investment plan that all these products and techniques become overwhelming and confusing.