The 3 Steps to investment success is
- Choose investment that have good fundamental
- Buy when the investment is under value
- Diversify our investment
When we invest in a investment that have a good fundamental, eg: a company that is growing constantly, with good income, good net profit, in a growing market that have high needs and high profit margin, that generates good return for their investor.
Once we found a list of investments that have good fundamental, we need to know when to buy and start invest in these investment, to minimize the risk that we lose money, and to maximize the chances that we can make a good profit, is to start invest in the investment when the investment is under value, that means the investment’s price is under estimated, and once the price is go back to the real value price or above , we are gaining a good profit.
Diversify our investment in a few different investment or even different asset type, so if we have 10 investments in total, 2 out 10 is losing money and 8 out 10 is making good money, the final result of our investment will still be a success, as in investments world there are no guarantee success.
What we can do is to minimize the risk and maximize the chance of earnings.
There are no easy way to investment success, as an investor, we need to keep learning on the different investment product, different trading plan , trading strategies , and keep practicing with paper trade or real money trade till we find what suits us best.
As different people have different trading style, some like low risk investment, as they want to feel safe , and don’t like losing money.
Some likes high growth, with high risk and high earnings.
Some likes long term investment, so they can buy and hold till 5 years 10 years and sees the result without having to looking at the stock / investment price every day .
Some likes to do short term investment and even day trade, as they can see the result and take their profit as soon as possible.
What’s the best way to make a success investment is to find out the best way to invest that suit’s your own investment style.
And best with a few different asset type to build a pro folio so you can diversify your risk.
for example: some will invest 80% of their money in low risk dividend stocks which gives them a stable income every year every month. and 20% of their money in high growth stocks.
Say the total investment money is $1,250,000
80% investment on low risk dividend stocks that gives 5% dividend every year, that is 5% of 1,000,000 every year, which equals to $50,000 of dividend a year divide it by 12 , that is $4166 dollars per month, and gives the investor a stable income.
20% investment on high growth stocks, which may brings an investment return up to 100%+ in 3 to 5 years, but of course with the higher potential growth , there are always comes with higher potential risk.
But with the 80% investment giving a stable dividend income, therefore it’s OK to use the 20% investment capital to take more risk.
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