Investments are tricky. They allow you to put your money behind opportunities you think will succeed in a public arena. If done correctly, investing can become a lucrative endeavour, but if you put your money in the wrong places, you could end up with nothing.
Creating an investment strategy is the best way to find your money making investments and monitor their success. It’s up to you to find the opportunities in the marketplace, but there are a few ways to go about qualifying investment opportunities.
To help you qualify your investments, we’ve put together a 5 step investment guide to success. The aim is giving you the ability to understand what seperates a good investment from a not so good one, and helps you decide when you should hop in, or if it’s time to trade or sell.
1 Collect Your Capital
If you are going to invest for small growths as a way to burn money, then you might want to start with penny stocks. These investments have the most potential go give you tons of shares for cheap, and if they take off, you’re in the money. It’s possible.
If you are looking to make a large investment in the hopes of a big return, you might not want to start until you have somewhere in the neighborhood of $5000 or more. Starting with a larger sum allows you to spread your investments across a larger area in the market, and can create multiple potential revenue streams.
2 Research the Stock
It’s normally an easy tell when a stock is doing well, especially when it sees constant overall growth. These are the stocks you want to look at when playing the market. You can get huge boosts in growth potential with your investment, and sell a few or all of them when it starts to plateau.
Sure, snagging a share in a corporate monster is good, but what if you could snag 500 shares from an up and coming company in an industry all their own?
It normally helps to set a budget to share ratio limit when you look to invest in an opportunity. It will help you shift your money around where it needs to go, so you can get more shares and more profit potential.
3 Research the Industry
The industry that your investment opportunity falls under can normally give you foresight into a company’s potential before you invest.
If the industry is on the rise, chances are, a growing investment opportunity will continue along with the industry and grow for a while.
If the industry is stagnant, it could honestly go either way, but unless that opportunity is going to revolutionize the industry to shift it into the limelight, you will generally see that growth plateau sooner.
If the industry is failing, this investment opportunity better be the savior of the industry, or they will be sure to meet the same fate as the industry as a whole.
4 Research the Market
When times are good and GDP is high, the market will show it. You will see more raises in stock prices and investments in the market as whole. When times are not so good, the market will reflect the same.
Keep an eye on the overall health of the market and watch for potential crash indicators, like older industries getting insane boosts and investments out of nowhere. That’s how we go back to the market crash in 2008.
The market as a whole had created so much debt for the banks that they were forced to ask for a bailout. Congress ultimately rejected the bailout bill, and the market crashed, hard. The moral of the story is watch the banks and watch the market for explosions good or bad.
5 Monitor the Investment
We are lucky to live in the world we live in because the internet allows us to take control of our investment opportunities. Having the ability to see the market’s health as a whole and monitor your personal investments is possible online. From investment guides to up-to-date investment monitoring equipment, you can get a leg up on the market, and buy, trade and sell like a pro.
If you take these 5 areas into account every time you look at an investment opportunity, you are sure to meet the market with more success. Allow yourself to see the full picture before jumping into an investment opportunity, but don’t wait so long that you can’t afford to be apart of the revolutionary opportunity you found but didn’t buy into.
How do you qualify your investment opportunities? Is there any red flags or selling signs people should be aware of? Share your tactics in the comments below.