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How to Come Up With the Best Investment Strategy For You

Step 1 – Identify your strengths and weaknesses

The first thing you want to do is identify your strengths and weaknesses. Think about all the activities you have ever done. Try to remember examples where the work seemed fun and easy. Try to think of examples where people constantly complimented you on how good you were at doing this task or job. Doing this exercise (identifying the EASY WORK) will help you to figure out your strengths. Make a list of the examples.

Another method would be to take a personality test. Personality tests are great at helping you to identify what your strengths are and what your weaknesses are. I have taken several personality tests and Meyers Briggs is a very popular test. You should be able to find personality tests online or at your local career center. Taking a personality test is as easy as taking a survey. Make a list of your strengths and weaknesses.

 

Step 2 – How much money do you want to make and how much do you have to spend to get started.

There are some investing strategies that require absolutely no money (buying real estate, article writing, affiliate marketing, mystery shopper, online surveys) to get started. On the flip side, there are strategies (stock market investing, tax lien investing, buying a business) that are impossible without some startup capital. Decide whether or not you want to spend money to get started or if you want to do as much as possible without spending your own money. Contrary to popular belief YOU DO NOT NEED MONEY TO MAKE MONEY!

 

Step 3 – Think about how much involvement you want to have with your strategy (active or passive)

Passive (residual) income strategies require very little involvement to keep them going once they are setup, hence the term “passive” income. On the other hand there are investing strategies that WILL require your constant involvement in order to be successful. A perfect example of an active strategy would be buying a stock option. Stock options lose value over time, so with this strategy time is working against you. The passive strategy to options investing would be if you were to “sell” stock options. With this strategy, time is in your favor and once you sell the option you usually don’t have to do anything.

 

Step 4 – Do a search on different types of investing strategies and make a list

Run a Google search on “investment strategies” and you will get millions of results. The goal here is to get a sizable list of the different investment strategies that are available to you. Write down as many strategies as you can find, have fun in this step. Think of if as a scavenger hunt to find investment strategies. They’re out there, just waiting to be discovered by you!

 

Step 5 – Do Further Research on Each Strategy in your list

Once you have your list of different strategies, you will want to do some further research on each one. Some will be strategies you may have already heard about and some won’t. Either way do some research into these strategies. You will want to find out how these strategies line up with the requirements from steps 1- 3 above. Basically you should have a checklist that factors in your your personality and interests so that you can screen the strategies. Use that checklist to eliminate the strategies that don’t match up.

 

Step 6 – Narrow your list down to five strategies, screen again then pick the top one

Once you have used the checklist to narrow down your list of investment strategies, get even more information and go through the list again. Identify the pros and cons (good and bad) of each strategy and then use that to pick the best strategy. Choose the investment strategy that most closely matches up with your personality and requirements from steps 1 -3.

 

Step 7 – Get Started!

Once you have your strategy in hand, the only thing left to it, is to do it. Get started and start making money now.

 

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The Best Investing Strategy

The Importance of an Investing Strategy

If you want to be a successful investor and make a lot of money, an investing strategy should be a very large and important part of what you do. It is absolutely necessary to be very successful. Luck will only get you so far.

Having an investing strategy will mean you have a plan to get you where you want to be. You will have a plan for how you will choose investments and how you will manage your portfolio. It will help keep you on track when you do research and help you achieve goals.

 

What Encompasses an Investing Strategy?

An investing strategy will involve several important points. First of all, you will need to choose the investment types you will invest in. You can invest in just one such as just stocks or just bonds, or you can invest in a variety. The more you invest in, the more work you’ll have to do.

Next, you will need to decide what your portfolio will be made up of. You know what type of investments, now be more specific. If you are investing in stocks, will you invest in 5 different companies from a broad range of industries or will you have 10 to 20 stocks with a smaller range?

You should know as much as you can about the type of investments you are going to be making in order to make sure your investing strategy is exactly how it should be. If you don’t have the necessary background information, you could make a lot of costly mistakes. Take the time to research and study beforehand.

Research is very important for any type of investment. You need to know that a company is a good investment before you buy. Learn how to do this research and come up with measure that each company has to hit. Make sure each investment you make is the best investment there is, according to your careful and meticulous research.

 

How to Build your Own Investing Strategy

In order to build your own investing strategy, you will need to sit down and create a plan. Using spreadsheets will help you out a lot if you know how to set them up and utilize them. You can build your own plan for the next year and up to when you plan to retire.

Keep this in mind as well when you are building a strategy, what are you investing for? You will want to take much less risk if you are investing for retirement as opposed to just building your wealth. Learn the difference between these ideas and how to plan accordingly.

 

How to Test Out and Improve your Investing Strategy to Make More Money

Once you have a plan and you are researching, buying, selling, etc. don’t think you are finished. You are going to spend at least a few hours each week from now on testing and improving what you are building. If you want to make money, you have to take this on as an ongoing project and not something that’s done and finished.

Keep doing research and keep an eye on your companies in the process. If you want to test out theories or ideas that you have but you don’t want to risk any money yet, use a free stock market simulation game. It will allow you to make trades without spending real money. You can then move onto real money later on when you feel more comfortable.

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Six Steps to Building an Investment Strategy

How do you Build an Investment Strategy?

When it comes to actually building your investment strategy, it will take some time, effort, learning, and planning. Follow these steps to build your own investment strategy:

 

Step 1: Decide on your Investments

Before you buy anything, decide what you want to put your money into. Don’t simply say, “I want the best investments.” Be specific. Are you going to buy stocks, bonds, mutual funds, real estate, commodities, etc.? Are you going to invest in one type of security or multiple ones?

The more you invest in, the more time and effort you’ll need to put into it. Keep this in mind when you are choosing a larger variety. Don’t spread yourself too thin or else you will make less money. Investing in a larger variety of securities, companies, etc. will not make you more money. You need to be diversified, but you need to be smart about it, too.

 

Step 2: Gain a Strong Knowledge of What you are Going to Do

Now that you know what securities you will put your money in, gain as much knowledge as you can about it. Get books, courses, look online, etc. and learn everything you can about what you’re planning to do.

If you are absolutely brand new to this, start with the basics. Even if it takes a few more months before you get started, it will be worth it. It’s better to wait a couple of months and break even or make a return than it is to get started right away and lose a lot of money. If you are worried about gaining experience, work with a free stock market simulation game until you are ready to invest real money. You can find further information on this type of game and get started at the link below.

If you find the information overwhelming, stick with studying one security. For example, stick with learning about stocks and plan to invest in 6 to 10 stocks first. Once you have the whole process mastered and you feel confident about your investment strategy, you can move onto other investment types if you so desire.

 

Step 3: Device a Research Strategy

Now you are getting into the investment strategy. Design a research strategy. Research is incredibly important for all types of investing. You need to know exactly what you are putting your money into and you need to know that it is a good buy.

When you study, you will also study about research. Once you know how to do it, you can make a strategy. Decide what kind of ratios, financial statement, and other information you will look for. Figure out how each stock, bond, or other investment will need to measure up before purchasing.

 

Step 4: Determine the Dollar Amount to Invest

Basically, the dollar amount you will invest will depend largely on what you can invest. Obviously, you can’t invest RM10,000 a month if you are barely making RM3,000 before taxes. Determine the exact dollar amount or the percentage of your income you will invest.

Try to give yourself a goal. Push yourself to invest more and more. If you think you can afford RM100 a month, start with that and try to do RM200 next month. The more you invest, the more you’ll make. Even a poor investment strategy will do well if you invest a lot.

 

Step 5: Build your Portfolio

Now it’s time to spend some money, but not in the way that will make you broke. Start buying securities and building your portfolio. After you’ve researched, you will know exactly what do buy. Buy as much of those securities as possible.

Build a strong portfolio. When you are researching, keep diversification in mind to minimize your risk and maximize your gains. Buy companies that show promise for growth or value increase in the future based on your research.

 

Step 6: Monitor your Portfolio

The beginning of your investment strategy is hardly the end. You will need to continue to monitor your portfolio and make changes as you go. Spend at least 1 hour per week per investment. For example, if you bought stock in 5 different companies, you should spend at least 5 hours per week researching that company.

As necessary, you will be buying and selling stock, or other securities. If you grow unsure about a corporation or you feel you’ve made the most on an investment you can, move on. Don’t lose money.

Most of all, continue studying and practicing your craft. Read all the books you can and take the information in slowly but steadily. Don’t automatically take all information you read or hear as perfect. Use it to help you along with your investment strategy.

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