If you’re a new investor who is interested in learning how to make wise investment decisions, Gordon Tang believes to learn how to make profitable investment decisions!
How to Make Good Investments:
1. Diversify your investments by purchasing shares in several different companies
Never make the mistake of placing all of your money into a single investment as if the business which you choose to invest in encounters financial difficulties and drops in value, you may lose thousands of dollars in a single day.
Instead, try to diversify your investment portfolio by choosing to invest in at least 5 different companies. As it’s highly unlikely that every single company which you choose to invest in, will experience a huge drop in market price, in the same month.
As an added benefit, if you choose to invest your hard earned money in several businesses, after 6 months you should learn which businesses you should invest more of your savings into and which businesses aren’t doing as well. As when it comes to investments, the only way to learn how to make wise investments is to compare the successes and failures of multiple businesses, which you’ve backed with a small cash investment.
2. Use virtual cash in order to get the hand of purchasing shares
Many websites which specialize in buying and selling stocks, allow new members to use virtual money to practice investing with. It’s well worth using virtual cash to “invest” in stocks before you invest real money in purchasing your first stocks. As you’ll be able to purchase virtual stocks in a variety of real-life companies, to see whether or not your initial decisions would make you money or cost you money.
If you find that a few of the businesses which you’ve invested virtual money in, actually make you virtual money, you may want to consider putting your money where your mouth is and investing real money in the companies which you’ve been experimenting with using virtual money.
3. Keep up to date with the latest stock prices and news
If you’re determined to make a small fortune, by investing in stocks, it’s crucial to keep up to date with the latest stock prices. As, you’ll want to know exactly when to purchase stocks at a low price and exactly when to sell your stocks when they skyrocket in price, in order to make an impressive return on your initial investment.
It’s well worth getting into the habit of checking stock prices for all of the stocks which you’re interested in purchasing, each morning, to find out whether it’s worth holding on to your stocks, purchasing further stocks or selling some of your stocks for a decent profit.
4. Decide whether you’d prefer to purchase short-term investments or long-term investments
If you choose to purchase short-term investments, you’ll aim to sell your stocks within a year for a substantial profit, while if you’re looking to follow a long-term strategy, you may prefer to purchase stocks, which you plan on holding on to for several years.
In order to avoid making reckless investment decisions, make sure to heed the invaluable investment advice listed above.