Tag Archives: risk

Top 7 Things to Consider Before You Start Investing

Guest Article By Linda Terrill 

Be it investors, potential investors or general public who is looking to start investing, everyone gets excited the minute they have extra cash on their hands and one of the usual plans is to invest it for quick profits. People want to start making their money work for them and that’s a very understandable and rational thought but sure enough one needs to be practical about their finances as well. There is a lot of due diligence and groundwork that goes into understanding the financial markets before one must start investing and it’s for their best as well!

An investment making company will generally help you get started with your investment and offer you end-to-end insights into how to make more money and how to invest money to achieve your financial goals. However, there are a few things you as an investor must consider before approaching any Asset Management Company or getting started on your investment journey.

Here are the top 7 things one should consider before they start investing to make more money:

1. Pay Off Prior Dues

No investment can start without you actually being done paying off your dues and clearing your credit. A clean slate for all your debts is very essential to begin investing stress free and focusing on returns.

2. Create Cash Emergency Fund

Before you start investing it is very important for you to have a separate cash fund prepared just in case of emergencies. There is no questioning the volatility of the market and you can’t really depend on redeeming from market when in dire need. Having an emergency fund lets you start your investment journey with a bit more ease.
3. Create Financial Goals

One of the most important questions often asked is how to invest money and earn quick profits! However, there is much more to investing than just expecting returns. It is equally important to have your financial goals set it place and invest accordingly. Be it buying a dream home, car or saving for retirement, an investment making company will know exactly how to help you get started.

4. Understand Financial Instruments

There are tons of financial instruments in the market which offer numerous benefits. The bigger question often is what you as an investor wish to achieve, quick profit, long term stability, lesser risk or just saving for the future? It’s not tough to make more money with your investments as long as your priorities are already quite clear.

5. Due Diligence on Investment Options

Asset Management Companies have a variety of financial instruments that an investor can pick from and ensure that they make more money. If you want to know how to invest money wisely on the other hand then it is best if you do your due diligence on all the financial products in the market and then make an informed decision to earn quick profits.

6. Research on market trends

How to invest money wisely is indeed a question every investor should be asking themselves or the investment making company who is helping them build a portfolio. Keeping updated about the market, staying on top of news in the world markets and knowing the current business trends makes it easier for the investors to pick their financial instruments for investment.

7. Evaluate your risk bearing capacity

Every individual has their own risk bearing capacities. An investment making company will often ask you the risk level your profile fits in as an investor as it helps them decide where and how to invest money and earn quick profits. How to invest money is often a question answered at the expense of how much risk are you willing to take for the same,

As simple and lucrative investing and making quick profit sounds, the truth is that unless you have a foundation in place and thorough research to build up, your investment portfolio won’t be solid.

Asset Management Companies are there to help investors with their portfolio, right from researching and investing to managing and reinvesting investors’ wealth. If you are new to the world of investing then these pointers will make sure that it doesn’t seem intimidating anymore!

Megacoinwealth is a leading Asset Management Company. Our top professionals guide you on making sound investment decisions to help you achieve your financial goals.

Article Source: https://EzineArticles.com/expert/Linda_Terrill/2561984

Article Source: http://EzineArticles.com/9962639

More About My Investing Strategy

I’m going to expand on the details of my investing strategy. Previous posts I have stated which stocks I prefer and basic outline of my criteria in selecting specific stocks to buy. Again, I’m going to state that I am a dividend investor and not a value investor. In my mind, the essential difference is that the value investor focuses on share price of the stock. The dividend investor focuses on whether the company issuing the stock pays dividends or not. I know that this is a very simplistic view, but bear with me.

As a dividend investor the price per share isn’t ignored. But it isn’t the primary importance. Just like the value investor, the dividends paid are not ignored, either, it’s just not as important as the price. The value investor looks for pure growth (i.e. increases in share price) even though they may plan on holding the stock for years. That’s how they view their stock holdings.

Dividend investors, at least for me, look at stocks growing in value also, but I also look at increasing the number of shares increasing by reinvesting those dividends that I receive. Value investors look to increase their stock ownership by additional purchases of the stock, especially during a DIP (Drop In Price). Again, this is another oversimplification.

To me the goal is to increase the number of shares I won with the minimal cost to me. Like a value investor, I will buy additional shares of stock on a DIP, otherwise I maintain my Divident ReInvestment Plan (DRIP). Basically, maximizing benefits and minimizing costs. When I review any potential stock to purchase I look at many factors.

  1. Does the company issue dividends? If no, I then move on to the next potential stock.
  2. If the company pays dividends, how much does it pay?
  3. How frequently does it pay dividends? Quarterly, monthly?
  4. What is the 5 Yr dividend growth?
  5. How long has it been paying dividends?

Once I get the answers to these basic questions, I look at the stock price. I then go through the similar analysis that a value investor goes through to determine if it is a stock to invest in or not. The stock may be one that I don’t feel is right for me at this point in time so I may put it on my Watchlist. Additionally, my strategy doesn’t just deal with buying stocks, I also have a strategy for when I should be selling. Because I am a dividend investor, dividends are key. If a company cuts/reduces their dividends two (2) period in a row, it becomes a prime candidate to be sold. I will now review the numbers in a different light and look at the stock to determine if there is a chance for the dividends to rebound. If in the they reduce it a third time or eliminate dividends, it becomes an automatic sell.

That’s my strategy for dividend investing in a nutshell. You may agree with it or you may not, but it is MINE. I really don’t have a hard and steadfast set of numbers for any of the quantitative elements. It really comes down to what I am comfortable with when I look at the numbers. To me stock selection is a subjective process, unique to the person. I may decide one way about a certain stock and you may decide another way. It has to do with how much risk you are willing to tolerate. Part of my strategy is to avoid high risk investments. How much risk am I willing to take on? Again, it’s subjective. I prefer ETFs over individual stocks for that very reason. If I buy individual stocks, I prefer an established company to a start-up. My tolerance of risk is tied to my timeline, which is now short. So, I don’t have much time to recover from any massive losses that I may incur. And lastly, my investment strategy is a “living thing”. As I progress and learn my investment strategy evolves and changes.

You can look at investment strategies from multiple people and take-away what you feel comfortable with and what lines up with your goals. Don’t let anyone else dictate what your strategy should be because if you find someone that tries to pressure you into adopting their strategy, keep digging and you’ll find out what their hidden agenda is.