By www.ProfitableInvestingTips.com
Make Money by Investing
Despite the fresh memory of the 2008 stock market crash it still possible to make money by investing in stocks. In order to make money by investing it is necessary to learn to do fundamental analysis of potential investments. In stock investing this involves finding the intrinsic value and margin of safety of a stock. In addition, successful investors learn how to diversify a stock portfolio, how to pick growth stocks, how to pick dividend stocks and how to how to manage risk in investment.
Safe Investments versus Profitable Investments
To make money by investing it is necessary to consider both what are safe investments and what is a good investment, from the viewpoint of potential profits? The ideal investment fits both criteria. The work of the investor is to find stocks that are underpriced but which hold the promise of good long term yield. The anticipated return on investment of a stock is commonly referred to as its intrinsic value. The factors that guarantee that a company will not go bankrupt during an economic downturn are collectively considered to be a stock’s margin of safety. Safe investments have a good margin of safety. Profitable investments need to have good intrinsic stock value. In both cases the best way to make money by investing is to find these stocks before the market does, buy them at a low price, and wait until the company makes money and the market drives the stock price up.
First Steps to Make Money by Investing
Investors should set aside money for investing. A good rule of thumb is to have sufficient savings set aside for six months of expenses. This is after you pay off any credit card debt! Anything over a ten percent return per year can be considered a good investment on a safe stock. If you are paying eighteen percent interest on credit card debt you are losing ground. Pay off your credit cards and put aside enough money for a rainy day fund. Then you will put aside a fund with which to make money by investing.
Next decide what your goals are. When you make money by investing are you going to save it for retirement, spend it on your children’s education, or take a long trip? Your goal in investing will help you determine your investment timeline. A long term investor can take more risk with his investments, or at least part of them, than someone who needs his investment capital in just a couple of years.
Before considering about investing in dividend stocks versus growth stocks, oil stocks versus pharmaceutics, or consumer goods stocks versus biotech put some money aside for a rainy day and decide just what your goals are.
Diversification
If any of us had a crystal ball we would find the absolutely best stock picks, buy the stocks, forget about them, and watch our money grow. However, not all of today’s good investments will be good in ten years. Good investments during good economic times may turn bad during a recession.
2. Despite the fresh memory of the
2008 stock market crash it still
possible to make money by
investing in stocks.
By www.ProfitableInvestingTips.com
3. In order to make money by
investing it is necessary to learn
to do fundamental analysis of
potential investments.
By www.ProfitableInvestingTips.com
4. In stock investing this involves
finding the intrinsic value and
margin of safety of a stock.
By www.ProfitableInvestingTips.com
5. In addition, successful investors
learn how to diversify a stock
portfolio, how to pick growth
stocks, how to pick dividend
stocks and how to how to
manage risk in investment.
By www.ProfitableInvestingTips.com
7. To make money by investing it is
necessary to consider both what
are safe investments and what is
a good investment, from the
viewpoint of potential profits?
By www.ProfitableInvestingTips.com
9. The work of the investor is to find
stocks that are underpriced but
which hold the promise of good
long term yield.
By www.ProfitableInvestingTips.com
10. The anticipated return on
investment of a stock is
commonly referred to as its
intrinsic value.
By www.ProfitableInvestingTips.com
11. The factors that guarantee that a
company will not go bankrupt
during an economic downturn are
collectively considered to be a
stock’s margin of safety.
By www.ProfitableInvestingTips.com
14. In both cases the best way to
make money by investing is to
find these stocks before the
market does, buy them at a low
price, and wait until the company
makes money and the market
drives the stock price up.
By www.ProfitableInvestingTips.com
16. Investors should set aside money
for investing.
By www.ProfitableInvestingTips.com
17. A good rule of thumb is to have
sufficient savings set aside for
six months of expenses.
By www.ProfitableInvestingTips.com
18. This is after you pay off any
credit card debt!
By www.ProfitableInvestingTips.com
19. Anything over a ten percent
return per year can be considered
a good investment on a safe
stock.!
By www.ProfitableInvestingTips.com
20. If you are paying eighteen percent
interest on credit card debt you
are losing ground.
Pay off your credit cards and put
aside enough money for a rainy
day fund.
By www.ProfitableInvestingTips.com
21. Then you will put aside a fund
with which to make money by
investing.
By www.ProfitableInvestingTips.com
22. Next decide what your goals are.
By www.ProfitableInvestingTips.com
23. When you make money by
investing are you going to save it
for retirement, spend it on your
children’s education, or take a
long trip?
By www.ProfitableInvestingTips.com
24. Your goal in investing will help
you determine your investment
timeline.
By www.ProfitableInvestingTips.com
25. A long term investor can take
more risk with his investments, or
at least part of them, than
someone who needs his
investment capital in just a
couple of years.
By www.ProfitableInvestingTips.com
26. Before considering about
investing in dividend stocks
versus growth stocks, oil stocks
versus pharmaceutics, or
consumer goods stocks versus
biotech put some money aside for
a rainy day and decide just what
your goals are.
By www.ProfitableInvestingTips.com
28. If any of us had a crystal ball we
would find the absolutely best
stock picks, buy the
stocks, forget about them, and
watch our money grow.
By www.ProfitableInvestingTips.com
29. However, not all of today’s good
investments will be good in ten
years.
By www.ProfitableInvestingTips.com
30. Good investments during good
economic times may turn bad
during a recession.
By www.ProfitableInvestingTips.com
31. Consumer goods stocks that are
“ho hum” investments in good
times can be life savers during a
recession.
By www.ProfitableInvestingTips.com
32. In learning how to invest, a smart
investor diversifies his stock
portfolio so that he can make
money by investing in good times
as well as bad.
By www.ProfitableInvestingTips.com
33. For more insights and useful
information regarding
investments and investing, visit
www.ProfitableInvestingTips.com
.
