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The Single Greatest Investing Lesson I Ever Learned.

Nebojsa Vujinovic

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The year 2024 is when Morgan Housel released The Psychology of Money. I believe it should be included in the Mount Rushmore of investment books, particularly for those who say that both history and psychology are essential to invest.

The book Housel includes a chapter that describes the stock market as a game where multiple games that have no connection are played simultaneously. In the words of the book, “Few things matter more with money than understanding your time horizon and not being persuaded by the actions and behaviours of people playing different games than you are.” This simple principle will have a lasting impact on your finances and is why it’s the most critical investment advice I’ve ever received.

The price of a stock is a crucial factor to understand

The cost of a stock at any moment is simply an indication of the consensus value derived by both buyers and sellers. However, many of these participants’ motives and motives for purchasing or selling the stock differ from yours.

For instance, you can have institutional investors as well as retail investors. Students and retired people. Long-term investors who have multi-decade time horizons as well as day traders. People who are short-sellers or remain on the long side. Futures and options traders and people who buy shares of stocks. The list goes on. Housel argues that many of these games have to contradict influence on the price movement of a particular stock. This is why a specific stock price rarely matches its intrinsic value over the long term.

The battle between fear and greed

There are times when the value of a share could be driven by greed. At others, the price may be caused by fear. In the current bear market, that is brutal, which is why you’re seeing confident investors who can sell excellent growth stocks and shift to value because they fear the market and would prefer to have an established company that has a solid balance account and positive free cash flow rather than take the risk of an entity whose worth is based on what it might be worth in the future rather than what it’s worth at the moment. We are seeing new companies that have lots of potential being removed from the market in the short term because of panic.

On the other hand, many value stocks and the oil and gas sector were undervalued in the years between the years 2020 and 2024. Likewise, certain growth stocks were able to see their valuations increase over their actual value. In the years before that, we saw investors take on more risk and weed out companies with little growth. We observed a lack of concern for the geopolitical significance of the energy sector, utilities, and defence stocks, favouring placing bets on the next trend.

Examples from the real world

The idea is that you can achieve clarity by understanding that the majority of capital in the market is playing a different game from you. Once you’ve figured that out, it’s clear why a top company such as Amazon can plummet more than 30% within a few weeks with nothing more than a weak earnings report and the general market volatility.

Let’s go an additional step with an example of a company such as Shopify (NYSE SHOP). Shopify ended the calendar year at less than $400 per share. The company gained momentum throughout the epidemic when e-commerce expanded as the gig economy came into full force; it grew to a market value of $200 billion and a record-breaking value per share of $1,762.92 on the 19th of November 2024. It has since fallen to its current price at around $335 per share.

Shopify’s stock includes a variety of games playing simultaneously. On the one hand, some long-term investors are convinced of Shopify’s capability to grow and add new merchants or have current merchants move to higher-priced plans and then have these merchants earn more which is beneficial to Shopify. Several investors were purchasing Shopify for a short-term “pandemic play” and didn’t focus on the actual business, which is why Shopify shares jumped over the top at a rapid rate in 2024.

Today, another one of these games is being played in the game of getting bored by selling stocks in growth that yield very little or no profits and attempting to cover it with safer names. When an investor is aware of the conflicting strategies, then it becomes a clearer sense of how a company like Shopify can change from boom to collapse. This doesn’t mean that the price movement in either direction is the right one, but it does help understand why it happened in the first place.

Leçons from Warren Buffett

Warren Buffett is an excellent example of an investor who is aware of precisely the game he’s playing. Buffett has stated repeatedly the odds of outperforming the roaring bull market since Buffett does not invest in numerous high-growth stocks and prefers sticking to values. However, he believes he can surpass the performance of the S&P 500 in time, and this has proven to be the case for the last several years.

Berkshire Hathaway’s portfolio might appear too conservative, as it includes many banks, insurance companies, oil and gas companies, and consumer staples companies. However, for Buffett, it’s the kind of business he would like to invest in. It’s his business, and he’s playing in the market under his own rules and tolerance for risk.

Investors do not influence the broader market. Therefore, taking control of our investment choices and preferences is the only way to be comfortable and gain direction even when the prices of stocks seem to fluctuate.

The silver liner

For investors who have a long-term view of stocks such as Shopify, the price swing of gains of 400% then 80percent losses over two years could be confusing and frustrating. It can be challenging to determine a fair value for a company when multiple motives are pulling at its stock price. But, there’s an upside.

In the long run, the fundamentals will always triumph. A glance at the share charts of companies that have been successful, such as Nike or Apple, and you’ll realize that selling offs are typical for an investment that is long-term and profitable. The benefit of investing in the long-term is that it’s an investment that has the odds favourable. The market is known to fall more quickly than it rises, but it does go up faster than it loses. The average annual compound growth percentage of S&P 500, which includes dividends that have been invested since 1965, has been about 10.5 per cent. That’s an enormous tailwind for long-term investors to gain by compounding interest.

By investing in businesses you are familiar with and allowing time to be an asset, An investor has more chance of ignoring the market’s noise and focusing on what is essentially the most.

Ten stocks we think are better than Shopify.

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Hi, my name is Nebojša, and I've been involved in digital marketing for over 15 years. I've written for various websites, covering a wide range of topics. I'm particularly interested in subjects like technology, gaming, app development, and I also have a passion for automobiles. Additionally, I work on SEO optimization. In my free time, I enjoy reading, walking, traveling and spending time with my wife and daughter.

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Post-Purchase Customer Experience – Why It’s the Key to Retention and Loyalty

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In today’s fiercely competitive marketplace, securing a sale is just the beginning of the customer journey, not the end. Post-purchase customer experience has emerged as a pivotal aspect of not only retaining clients but also building unwavering loyalty.

Once the transaction is completed, a new chapter unfolds—one that can either transform a one-time buyer into a lifelong advocate or reduce them to just another statistic in the sea of disengaged consumers. Every interaction a customer has after the purchase, from personalized follow-ups to seamless customer support, plays a crucial role in shaping their perception of your brand.

As the dust settles on their initial decision to buy, it’s the ongoing experiences that will ultimately determine whether they return for more or drift away into the clutches of competitors. Understanding and optimizing this journey is not merely an option anymore; it’s a necessity for businesses striving to cultivate lasting relationships in a world where choices abound.

The Path to Loyalty: How Post-Purchase Experience Shapes Customer Relationships

Source: reverselogix.com

The journey to fostering customer loyalty begins long after the initial purchase is made; it is intricately woven into the fabric of the post-purchase experience. Picture this: a customer who eagerly anticipates their delivery, receiving a thoughtful follow-up email that not only confirms shipment but also includes tips for maximizing the product’s use—this simple gesture cultivates a sense of connection.

Afterward, a timely survey asking for feedback demonstrates that their voice matters, transforming a transactional relationship into a dialogue. Each element, from personalized recommendations based on their purchase history to dedicated customer support, deepens trust and enhances the emotional bond.

In this ever-competitive landscape, understanding that retention hinges not on the initial sale, but on the entire journey afterwards, can unlock the secret to creating lifelong advocates for your brand.

Beyond the Sale: The Critical Role of Aftercare in Customer Retention

Source: globalresponse.com

In the whirlwind of commerce, where transactions often take center stage, one critical aspect frequently slips through the cracks: aftercare. This pivotal phase begins the moment a customer clicks “confirm” on their order, extending well beyond the point of sale.

It’s not merely a follow-up; it’s a commitment to nurturing the relationship, a chance to reinforce the connection established during their buying journey. Think of aftercare as the secret sauce of customer loyalty—personalized messages, helpful tips, and timely support can transform an ordinary experience into an extraordinary one.

Customers who feel valued and supported are more likely to return, not just for the products they cherish but for the community and service that accompany them. In a landscape flooded with choices, businesses that prioritize aftercare don’t just sell products; they cultivate loyalty, turning one-time buyers into lifelong advocates.

Conclusion

Source: youngurbanproject.com

In conclusion, the post-purchase customer experience is a critical pillar in fostering retention and loyalty among consumers. By understanding and enhancing this stage of the customer journey, businesses can build lasting relationships that go beyond a single transaction.

Effective post-purchase marketing not only reinforces the value of the initial purchase but also encourages repeat business through personalized communication and ongoing engagement. As companies strive to differentiate themselves in a competitive landscape, prioritizing the post-purchase experience will prove essential in transforming customers into brand advocates, ultimately driving sustainable growth and long-term success.

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From Trader to Business Owner – How to Build Your Own Trading Firm

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Transitioning from a trader to a business owner is a thrilling journey, a leap from the exhilarating chaos of the markets into the strategic realm of entrepreneurship. Many traders, fueled by their passion for the financial world, dream of establishing their trading firm—a bold move that promises both independence and potential prosperity.

Yet, this path is strewn with challenges, requiring not just deep market knowledge but also formidable skills in management, finance, and strategic planning. How do you go from analyzing charts and executing trades to overseeing a team of traders and making critical business decisions? In this article, we’ll explore the multifaceted process of building your trading firm, offering insights on everything from legal considerations to cultivating a strong company culture.

Prepare to navigate the nuances of this transition—where the fierce nature of trading meets the intricate art of business ownership. Your journey begins now.

Identifying Your Niche in the Trading Market

Source: udemy.com

Identifying your niche in the trading market is an essential first step on your journey from trader to business owner. Start by reflecting on what truly captivates you—whether it’s forex, stocks, options, or commodities—and the unique strategies you’ve developed through experience.

Tools like depth of market software can play a pivotal role during this process, offering detailed insights into market trends and liquidity levels, which can help you pinpoint areas of opportunity. Dive deep into market trends, analyzing which segments show potential for growth and profitability, while also considering the competition.

Don’t shy away from experimenting; this phase often involves trial and error, as you test different trading styles against varying market conditions. Additionally, leverage your existing knowledge to carve out a specialized area, perhaps focusing on a demographic or asset class that isn’t saturated.

Ultimately, the key lies in blending your passion with market demands, creating a distinctive offering that speaks to both your interests and the needs of prospective clients.

Creating a Business Plan for Your Trading Firm

Source: www.getwork.co.uk

Creating a business plan for your trading firm is not merely a formality; it’s the foundation upon which your entrepreneurial dreams will stand. Begin by defining your vision—what kind of trading strategies will you employ? Will you focus on equity markets, forex, or perhaps cryptocurrencies? This clarity will inform every aspect of your plan, from your target market to your operational framework. Next, conduct a thorough market analysis to identify your competitors and potential clients, ensuring your unique selling proposition shines brightly amidst the noise.

Financial projections are crucial; outline your startup costs, expected revenues, and break-even analysis to illustrate the viability of your venture. Don’t forget to address risk management—how will you safeguard your capital against market volatility? Each section of your plan should weave together, showcasing not only your ambitions but also a pragmatic approach to navigating the complexities of the trading landscape.

This document is your blueprint for success; invest the time to make it comprehensive and compelling.

Legal Considerations for Starting a Trading Firm

Source: luxalgo.com

Establishing a trading firm entails navigating a labyrinth of legal considerations, intricately woven into the fabric of financial regulations. Aspiring business owners must first determine the appropriate business structure—whether a sole proprietorship, partnership, or corporation—each carrying its legal ramifications and tax obligations.

Securing the necessary licenses and permits is paramount; depending on your trading strategies and the markets you operate in, you may need to register with regulatory bodies like the SEC or FINRA. Additionally, compliance with anti-money laundering laws and data protection regulations will shape operational protocols, safeguarding both your firm and clientele. As you forge ahead, consulting with legal professionals proficient in financial regulations is not just wise—it’s essential, ensuring that your firm not only thrives but does so within the bounds of the law, avoiding the perilous pitfalls that could threaten your entrepreneurial dreams.

Conclusion

In conclusion, transitioning from a trader to a business owner by establishing your trading firm is an exciting yet challenging journey that requires careful planning, strategic decision-making, and an adept understanding of market dynamics. By leveraging essential resources, including cutting-edge tools like depth-of-market software, you can enhance your trading strategies and gain valuable insights into market trends.

Building a successful trading firm involves not only honing your trading skills but also developing a solid business framework, fostering a collaborative environment, and staying agile in a rapidly evolving marketplace. With the right approach and commitment to continuous learning, the path from trader to business owner can lead to remarkable growth and fulfillment in the world of finance.

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How the Rise of AI and Automation is Impacting the Accounting Profession

Anita Kantar

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The adoption of advanced technologies is reshaping how businesses handle financial processes. Tools powered by artificial intelligence (AI) and automation are transforming traditional workflows, introducing both opportunities and challenges for professionals in finance.

Accountants must now adapt to thrive in a landscape dominated by innovation.

Key Points:

  • Automation reduces manual data entry, boosting accuracy.
  • AI enables predictive insights for better decision-making.
  • Technology frees up time for strategic tasks.
  • Skills in data analysis and AI tools are essential.
  • Ethical considerations are critical for implementing automation.

Automation and Its Role in Streamlining Financial Tasks

Automation tools have become indispensable for reducing repetitive and time-intensive tasks. Functions such as payroll processing, tax filings, and financial reconciliations can now be completed faster and with fewer errors. Businesses looking to optimize their operations rely heavily on platforms like those recommended by Accountancy Capital for sourcing qualified professionals. For more information visit their website www.accountancycapital.co.uk.

By eliminating the burden of repetitive tasks, automation allows accountants to focus on advisory roles, providing higher-value services to clients. This shift highlights the need for upskilling to remain competitive in a changing landscape.

Source: rvnatech.com

How AI Improves Decision-Making in Financial Management

AI tools analyze vast amounts of data to identify patterns and trends that humans might overlook. This capability enhances decision-making, particularly in areas like forecasting and risk assessment. For example:

  1. Predictive analytics ─ AI can anticipate cash flow trends or market risks, giving businesses a proactive advantage.
  2. Fraud detection ─ Algorithms flag irregularities in real-time, reducing financial losses.
  3. Expense optimization ─ Automated systems recommend cost-saving measures based on historical spending patterns.

Leveraging such capabilities requires an understanding of technology, coupled with expertise in interpreting results for actionable insights.

Challenges Created by Technological Advancements

The rapid adoption of AI and automation poses challenges for professionals, including:

  • Skill gaps ─ Transitioning from traditional methods to tech-driven workflows require upskilling.
  • Job displacement ─ Roles focused on manual tasks are at risk of becoming obsolete.
  • Ethical concerns ─ Decision-making algorithms may introduce bias if not properly monitored.

Mitigating these challenges involves ongoing education and embracing continuous professional development.

Source: runeleven.com

Skills Accountants Must Develop to Stay Relevant

The changing landscape necessitates a shift in core competencies. Key skills include:

  1. Proficiency in data analysis tools ─ Knowledge of software that integrates AI is crucial for staying relevant.
  2. Soft skills ─ Communication and advisory capabilities remain vital, even as technology handles routine tasks.
  3. Ethical awareness ─ Understanding the limitations and implications of technology ensures responsible implementation.

Combining traditional expertise with technological fluency is the key to long-term success.

Benefits of Automation for Accounting Firms

Automation tools deliver measurable benefits for firms, including:

  • Efficiency gains ─ Faster processing of routine functions, reducing turnaround times for clients.
  • Cost savings ─ Automated workflows lower operational expenses.
  • Scalability ─ Firms can handle larger client bases without increasing staff.

By adopting technology thoughtfully, firms can maintain a competitive edge while providing exceptional service.

Source: mcgowanprofessional.com

Ethical Implications of Adopting AI in Finance

AI’s growing role introduces ethical concerns that professionals must address. Bias in algorithms, privacy concerns, and transparency issues are common challenges. Firms must establish guidelines to ensure that AI tools align with ethical practices. Regular audits and accountability measures help maintain trust.

Future Trends and Opportunities in Financial Automation

Looking ahead, technologies like blockchain and machine learning will further transform financial practices. Accountants who embrace innovation will find opportunities in consulting, compliance, and strategic planning. Staying informed about emerging trends ensures readiness for new developments.

Conclusion

The rise of AI and automation is not just reshaping workflows but redefining the role of accountants altogether. By investing in upskilling and adopting tools thoughtfully, financial professionals can transition from traditional roles to strategic advisors, ensuring continued relevance in an evolving landscape.

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