Be a real investor

Over the years, I've always tried to remind my readers to pay attention to two basic facts about investing. Equity investing (including equity mutual funds) is like owning a business, and fixed-income investing is like lending to a company. These are basic, self-evident ideas, but how often we lose sight of them is surprising. Understanding these fundamental principles can significantly impact your attitude toward your investments. When you invest in equities, you become a part-owner of the companies you invest in, which means your returns are tied to their success or failure. However, most of the time, it does not feel like that because you are just buying and selling shares.