The Do's and Don'ts of successful investing
Successful investing has a lot of things in common. If you are new to the world of investing there are certain things that can help determine whether you are successful or not. By taking the time to educate yourself about the guidelines of successful investing, you are increasing the chances that your investments will pay off, in the long run. Here are the do's and don'ts of successful investing-
- Do invest in a company that has the potential to stay in the market for a long time to come. If you are considering investing in a company that has a hot market, for a current trend, keep in mind that trends fade and your investment may go with it. For a successful investment you need to see that the company you are considering investing in will be going strong at least 5-7 years down the road.
- Don't invest with a company that has short sighted management. If the management of the company has no plans to develop further products or processes, in order to boost sales, this is a red flag. You want to make sure that the management of the company, has real plans to continue on with the growth of the company, after the current product lines have been exploited.
- Do make sure that any company you choose to invest in has a well developed research and development arm. If you overlook this important function of a company, you may find yourself with an investment that is literally worth nothing. You want to make sure that the company has plans to continue with product development, for many years to come.
- Don't invest in a company that has a mediocre sales organization. No matter how great the product or services are of any particular company, if they can't sell them, they won't make it. It is equally important to not only have great products, but a highly refined and developed way to sell them. If the company can't move their products, there is little chance that your investment will have a great return.
- Do invest in a company that has outstanding management. Savvy investors know that they are really investing in the people behind the ideas. No matter how wonderful a product or service, is it will be the people who run the company who determine its success. If the company has honest, experienced managers who are experts in their field, you are much more likely to have a positive return on your investment. If you are unsure in any way about the management, it is better for you to look for an investment someplace else.
- Don't invest in something you don't understand. Too often investors are sucked into an investment, by a smooth talking sales person, pressure from other investors or a worry that they are missing out on the next big thing. This is always a mistake. If after reading all of the appropriate literature, if you still feel that the investing strategy is overly complicated, or you just don't get it, then pass it on by. Many of the world's most well known (and wealthiest) investors have passed on investment opportunities that they didn't understand. You should never allow your emotions to make your investing decision, just cold, hard facts.
- Do pay attention to investment opportunities-Savvy investors know that there are opportunities for investing everywhere. You should never miss a chance to be looking for that next great investment. Talking to friends and family, staying current with what is going on and watching for hot products can all be ways to find that next great investment that is right for you.