Each and every investor should take into consideration one very crucial fact before investing, and it is called "opportunity cost".
As described in Wikipedia:
"Opportunity cost is the cost incurred (sacrifice) by choosing one option over the next best alternative (which may be equally desired). Thus, opportunity cost is the cost of pursuing one choice instead of another. Every action has an opportunity cost. For example, someone who invests $10,000 in a stock denies oneself the interest that one can easily earn by leaving the $10,000 dollars in a bank account instead. Opportunity cost is not restricted to monetary or financial costs: lost time, pleasure or any other benefit that provides utility should also be considered.
Opportunity cost is a key concept in economics because it implies the choice between desirable, yet mutually-exclusive results."
|