Traditionally people relied on investment advisers for insight and direction. Nowadays the world wide web provides investors with a wealth of information.
The average investment-seeker does not know where to begin their search for profitable investment opportunities. This is why so many people rely heavily upon money managers and financial advisers for insight and direction when investing. Although traditionally this has been the accepted strategy many have taken to reach their investment goals, investors are learning that there are a number of other resources that can be relied upon to help them make important investing decisions.
The world wide web has introduced investors to a wealth of information. This has come in the form of blog posts, investment forums, investing communities, and online reviews. Albeit there are a great many instances where people are simply sharing their personal opinion, there are also valuable first-hand experiences to be found. An investor’s own account of their exposure to an investment product has value beyond that of someone’s sentiment; agreed?
There are undoubtedly people who spread information that is untrue and benefits only themselves. No one likes being lied to. Thus, to reduce the chances of this occurring when sifting through online content, investment-seekers should make every effort to reach out to the sources of their information. Like a journalist or detective, dig deeper and make contact with people who are “in the know,” and can add value to your inquisition. Avoid opinions at all costs and stay focused on the genuine facts.
Even though new investors are discovering they do not have to rely solely upon the information provided by bias, misinformed investment advisers, it is still important for them to verify the credibility of their alternative, internet sources. Without a doubt, whether online or not, carefully vetted information is the key to any investor’s long-term investing success.
Having to make a choice of which investment opportunities are right for you is difficult. Each investor, yourself included, has their own investing criteria and process they will follow when choosing investments. For myself, I follow a three “r” measurement, which carefully considers the investment’s associated risk, region, and reward.
Carefully considering the risk associated with an investment is not a new strategy for investing. However, making a proper assessment of your tolerance for risk is very important. It is much more than your personal feeling about an opportunity. It factors-in your investment timeline and investing goals to give you a true picture of your ability to handle risk. Doing so can identify opportunities to invest that have a higher rate of return, and may have been overlooked by a timid investor’s strategy.
The economic growth in regions undeniably affects the performance of investments in that area. At the moment, the Asian region is demonstrating prosperity and is providing profitable options for investors. An example of this is container shipping investments from Davenport Laroche. The company operates out of Hong Kong, a shipping mecca that services a great number of the world’s container shipping lines.
Clearly, the rate of return is of primary interest to every investor. It is paramount in achieving financial goals. Savvy investors know that identifying investments that pay consistent returns can be used to supplement income or reinvest to build wealth more quickly.
It is understandable that investors will have additional factors they would like to consider when choosing investments to add to their investing portfolio. The three “r” measurement – Risk, Region, and Return – I have shared above is most valuable to those investment seekers who feel overwhelmed by the number of options they have encountered, and need help making a “short list” of investments to pursue.
The investment community is full of investing opportunities. Some of the available investments are more appealing than others, as decided upon by an established set of risks and rewards. Based on these risks and rewards, investors will decide which options fit into their portfolio and best helps them achieve their investing goals. Regardless of the opportunity, expect that experienced investors will heavily scrutinize the benefits and dangers of each individual option.
There are a number of factors that help investment seekers determine the amount of risk associated with an investment opportunity. Some of these include the company’s brand reputation and value, as well as established performance and potential for future industry growth. If an investor is satisfied with the corporate outlook, the risk may be considered acceptable. If there are aspects that are troublesome, or are cause for worry, investors would be wise to discount and avoid those investing options.
An investment’s return on investment (ROI) plays a vital role in the investor’s portfolio performance. The investment reward is important, in that investors rely upon it to move them closer to their financial goals. Moreover, an investment’s reward is sometimes used in determining the risk of investing. When returns are high, some investors have an increased tolerance for risk. This is why options are best studied and reviewed on an individual basis.
It is undeniable the influence that risk and reward has on investment seekers’ decisions when choosing investments to add to their portfolio. By carefully following their investing road map, investors will be able to identify investments that move them forward toward building personal wealth, all the while maintaining an acceptable level of risk in their portfolio. In some instances, this will require that investors exercise self-discipline and carefully weigh risk and reward before making the decision to invest.
Three things to consider when choosing investments for your portfolio are:
- industry or sector,
- tolerance for risk, and
- rate of return.
In most instances, the information you collect researching these factors will provide answers to important questions, as well as help you make important investment decisions. Given the attention they deserve, these factors will influence your choices and give your investing strategy the direction it needs.
Industry or Sector
Based upon global and domestic economic performance, select an industry to invest in that has demonstrated prosperity and potential for future growth. For example, in times of conflict and war, defense and military-related corporations often enjoy a rise in profits. As well, the international container shipping industry – which is responsible for transporting more than ninety percent of the world’s goods – offers a number of opportunities to invest in too.
Tolerance For Risk
The amount of risk you can tolerate dictates and limits the investing options you have. Unless you are a seasoned, affluent investor, investments that are subject to market volatility, as well as financial and economic uncertainty should be avoided. Instead, focus your attention on investment that offer regular dividends or a residual income.
Rate of Return
Although everyone is in search of a “great” return, everyone’s definition of “great” is likely to be a little different. Sure for some it will be high rates of return, but for others it may be smaller, more consistent monthly returns. It is ok to be enthusiastic about investing, but do not let your decisions be influenced by greed.
Making choices about what type of investments to pursue is the first challenge you will face as a novice investor, particularly if you choose to not rely on an investment adviser or money manager. Carefully consider the factors outlined above for an introspective that reveals your best investing options when choosing investments.
As private investors, we do not have access to the insightful information that institutional investors do. So, when we look for new investments to add to our investment portfolio, we must conduct our own research to make good, educated investing decisions. For myself, this includes watching interviews, reading published books and memoirs, as well as perusing investor testimonials and reviews.
Taking the time to watch or read an interview done with a world renown investor, like Warren Buffet for example, can deliver valuable insight, that was collected from years of investing experience. I am in favor of interviews because of the freedom each participant has to engage in a deep, detailed conversation. This intimate environment makes the exchange of information easier to communicate and easier to receive; thus, much more valuable.
The trouble I see with interviews is that they are short, often only a few minutes. Thus, there is not always a great deal to process and apply to your investment portfolio. On the other hand, published books and memoirs offer several chapters of first-hand accounts and experiences. These valuable resources can be used to learn and apply tried and proven strategies for successful investing. This is because they are offered as a personal perspective and interpretation.
Reading an investor’s review can provide more detailed information about a specific investment opportunity. In most instances, the information found in communities, forums, and blog comments is shared by people with different motives. Therefore the “lessons learned” should be subject to intense scrutiny. To be valuable, it is important that the moderator allow the audience’s comments to encourage constructive debate and not mislead visitors with fake news or a fake review.
Every investor will have their own approach to researching investment opportunities and building their investment portfolio. The resources I recommended have given me the confidence I needed to make intelligent investing decisions. I invite you to include parts of my research strategy into parts of your own.