That is a good question, what happens when you are “winning”
money but really you are losing it?
Let see if I can clarify a bit mi idea, suppose you
invest $ 1,000 in January and it generates you – at the end of the year - $ 250
extra. This shows that you’ve increased your capital in $ 250 and now you hold
an amount of $ 1,250. You can be happy, expressed as a percentage your capital
grew 25%. This shows a good result!
Now, can this not be really a good result? The answer
is “yes”. Now, let think that you leave in a country that deals with a high
level of inflation – for example – 26%, then your original investment “produced”
you a loss of 1%!
So, in countries like the one of the example you’ll be
winning – really winning – as far as your earnings are tied – at least – to the
country’s level of inflation.
Be aware of this at the moment of taking your
investment decisions!
Till my next post!
Best regards
Prof. Lic. Fernando
Julio Silva, MSc.
March 2012
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