Choosing the Right Investments for You
With all of the investment opportunities out there today, it
might seem difficult to decide which one is the right one for
you. When it really comes down to it, though, having such a
large variety of options is more of a benefit than a
hindrance... it allows you to customize your investment
portfolio to your individual tastes much more than you would be
able to with only a few choices.
Unfortunately, it can sometimes be quite hard to figure out if
an investment is right for you until it's too late... the stock
might go through a drastic increase or decline in price, or you
might only have a limited time to invest in a certain company's
stock before a merger or split.
To help you take advantage of the investment opportunities that
present themselves to you, here are a few useful tips that might
help you to decide whether or not an investment is the right one
for you.
Price
Obviously, the price that a stock or bond is currently selling
for can make a big difference on whether or not the investment
opportunity is right for you. If you're trying to invest on a
limited income or you simply don't have the money to spare for
large investments, you might want to reconsider certain
high-priced stocks unless you're fairly certain that they'll
show you a good return. Even then, you might want to consider
buying partial shares over time instead of several shares now.
History
The history of a particular stock or bond can tell you a lot. If
the price for the particular stock has always been quite low and
suddenly rises over time, there's a good chance that it will
drop again before too long and if you invest when it's high you
might lose money on the deal. On the other hand, if a certain
stock has been climbing steadily or has taken a slight dip from
its usual prices (without any company news causing the drop)
then you might have a good chance at making money in the long
run.
Time
Some investment opportunities have a time limit attached to
them... perhaps a company is selling shares for a brief period
of time in order to find investors for a new branch, or a
company is preparing to merge with another or split from
another. You should use caution before deciding to invest in one
of these opportunities, and investigate the stock prices for the
companies involved. If they've performed well in the past,
there's a good change that you'll be able to come out on top in
the deal. If, however, the company has had problems (especially
recently), you might be better off to let this one pass you by.
Recommendations
Where you hear about the investment opportunity can have a large
bearing on how good the opportunity actually is. Advice from
market professionals can usually be trusted to be good, but you
should never act on a stock tip that you receive as part of a
junk e-mail or an unsolicited advertisement. You should also
take extreme care if you happen to work for the company that
you've heard the tip about... depending upon what you buy and
when, you might have problems with insider trading meaning that
you had access to information that the general public didn't.
Other Circumstances
Of course, there are other circumstances that might arise that
aren't mentioned here. If this happens, then seek the advice of
someone that you trust or simply follow your own instincts.
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