The best investments are those that pay you back repeatedly. I always tell investors to come up with their own method of selecting investments. But I’m constantly asked for some general tips, so here are my top ways in which you can find the best investments for blue chip stocks, currencies, or even real estate.
Do Your Research
Whether it’s a company or an area of town, you need to research what you’re investing in. You should look at past performance, present performance, and what analysts are saying about the future. I’ve always found that a basic Google search will tell you whether something is worth considering.
From there, you can decide whether it’s time to dig deeper.
Look at the Volume
For any form of stock, you need to look at the volume. The volume of a stock is how much of a stock is being traded every day. It’s pointless taking a winning stock that’s spiking if you can’t buy or sell whenever you want to. Thankfully, the majority of stocks don’t have this problem.
But I would still consider high volume investments purely to be on the safe side.
Scouting for News
What you see on CNN or the Wall Street Journal is news that’s hit the mainstream. Avid investors were aware of this news weeks before, though.
Let’s use an example. Company A has announced a merger. But now that you’ve heard about it you’re already too late to capitalize. Smart investors heard about the rumors months ago because they dug deeper than mainstream media outlets.
Learn how to be a good news scout.
Don’t Blindly Follow Advice (Including Mine)
I run the Tim Sykes Millionaire Challenge. What I teach appears to be contradictory when I say it’s important for you to listen to what others say but also not to follow what others say. Learn to sift through the little tidbits of news you read as you research an investment.
You must find your own way. The mark of a good investor is knowing when to take someone’s advice and when to reject it objectively.
I’ve followed mentors before and then decided to go against them six months later. That’s how to trade smart.
Look for Patterns
Spotting investment patterns can help you to predict what the right move is on short term and medium-term investments. History always repeats itself, to an extent.
For example, I can reliably say that 15-20 years after a major crash like 2008 the same thing is going to happen again. I also know that when stocks constantly reach record highs it’s inevitable that a big market correction is on the horizon.
Use your experience to pick up on these patterns and you’ll naturally become a more adept investor over time.
Last Word – Invest Smart
Most investment decisions are made through great research. I’m a firm believer that taking your time over investing decisions is the key to making better decisions.