Learning the basic investment concept: a good start in investing2015 Dec 9
The first step in investing is learning the investment concept itself. It is very important that you understand the basic rules in investing in order for your investment to profit and to prevent losses.
As we all know, losing or gaining money in any investment is dependent on the performance of your investment. This is the risk in investing. There are times that the market’s performance is good, giving you a huge amount of profits or return on investment. However, there are times that the market is not performing well, so your profits are stagnant, or worse, you might not have any profits at all. In the worst of times, there are some investors that even lose their capital or entire business—in the snap of the fingers.
In investing, the primary rule is to never invest in something that you are not familiar with. That is why, it is very important to study how certain products or services perform in the market. By doing this, you are not exposing yourself at risk of losing your hard-earned money. Remember: even in business, safety comes first.
Income is the primary goal of any business. It is by carefully designing your business plan will ensure a steady flow of income. Before entering a business or investing your money in some financial or business entities, make sure that you do a SWOT analysis. SWOT stands for Strengths and Weakness, Opportunities and Strengths. By doing a SWOT analysis, you would know if the business will profit or not, and what are the remedies that you can apply in order to prevent more losses.
Growth and expansion are two words synonymous with good business. As your income is going steady and your surplus capital is going high, it is now time to expand your business.
Expansion can mean two things: branching or selling stocks. Branching can be done in establishing a physical branch of your business elsewhere and manage it yourself or selling a franchise. In stocks, you are making the public a partner in your business and sharing your profits with them. In the latter, you need to register your business in the stock exchange in order to open your shares for public buying.
On the other hand, speculation is the riskiest business but you can give you the highest gain. Speculation is the way of predicting (and sometimes influencing) the market movement in order to gain profits. This business concept is used in petrol and stocks.
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