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The Investment Strategies Which Made Many Millions

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Investment strategies to make money

As an entrepreneur you have to always remember that “The more you risk the more you can earn”. Many investment strategies are carved with this notion in mind.

Don’t be scared to take risks. The important thing is to, overcome the mistakes and reach your goal.

However there are certain mistakes you cannot afford to make investor. Tom Brown, financial Analyst at City FALCON financial advises investors to avoid making bad investment decisions.

Read: 8 Mistakes entrepreneurs make when pitching to investors

It is not advisable to invest in “fashionable” assets. When supplies exceed demand, prices drop. “In a situation where there is an excessive demand for some assets with a view of its sale results in the rapid growth of prices, called bubble, don’t forget that any bubble is known to eventually bursts”. Take the Dutch experience during the booming market of tulips captured all: florist, businessmen, civil servants, small shopkeepers and even footmen. All bulbs are bought for resale. In 1636, the price of a tulip reaches the value of a home. But when supply exceeds demand, prices have dropped on tulips many times, which led to the ruin of many hapless speculators. Do not make the same mistake

Don’t rush to sell shares after the bad news. You must first of all assess if it’s the “beginning of a downward trend in the market, which will lead to large losses”. Don’t be quick to sell shares after a slight drop in prices. If you do that there are professional players and fraudsters, who make good on this.

Read: If you believe in your idea, invest yourself in it

Playing in the financial casino is highly risky. It might seem simpler and easier to buy stocks, wait for the market growth, and sell them at a profit. Investors who do this often take the money in a loan secured by a personal property. The risk in this is that if the market falls, investors are left without money and without property.

Most investors are in a rush to get everything all at once. Take your time. “Choosing the best stock, they immediately put it in a large amount. And then we are surprised when this stock lags behind the market or brings losses. This happens only because the rules are neglected investment diversification and gradual entry into the market. The worst part is not even that these investors lose money, but the fact that they have a stable allergy to any further investments in the stock market”

Read: 10 Secrets for success from 5 self-made billionaires

These are some rules to follow as an investor to avoid bankruptcy:

“Formulate your vision, taking into account the investment objectives, attitude to risk, age and so on. Otherwise, the scope of the investment will be for you a cat in a bag”.

“Start with simple tools (such as mutual funds), and as they gain experience, go to the more complex. The same principle should be applied when choosing a strategy – start with a conservative and move to more risky”.

“Stick to the chosen strategy, not trying to catch a dubious success. Investing in the stock market is calculated on the horizon for at least two years. The investor often simply doesn’t make friends with a calculator or lazy to properly examine the object of investment. More often stocks bought simply on the advice or example of friends amateurs”.

“Reduce the risk of loss due to diversification of the portfolio and the gradual entry into the market”.

Read: 10 Life lessons that will help you run your own business successfully

Investing is a long journey. One that you must commit to every day and get better at it. There is no winning formula that works for all, but the above investment strategies will surely go a long way to help.

Investments

What oversubscribed bonds really mean

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When a country or business entity goes to the market to issue bonds, it is for one reason only – to raise funds.

Several reasons, but certainly financial, compel countries and businesses to resort to issuing debt instruments in the primary market. But once they are on the market, they are only there to shop for money.

Bonds are debt investments in which investors lend money to an entity (corporate body or government) which borrows the funds for a defined period of time at fixed or variable interest rate. Bonds are fixed income securities and may be traded in the secondary market after issue, usually on an exchange or over-the-counter. Bonds may pay interests (coupons) periodically over its life or at maturity only. These days, bonds may carry certain specific features beyond the widely known traditional characteristics of bonds. For example, some corporate bonds are callable, convertible, zero coupon, and even variable coupon bonds.

To issue a bond, a prospective bond issuer goes to the primary market with its offer. This offering is expected to communicate at least the amount intended to be raised, the tenor of the security among others. These are usually communicated through a prospectus. Investors usually submit their bids to the issuer for consideration. The bid submitted will include the amount and rate at which the investor is prepared to lend to the borrower (the corporate entity or governmental body).

The total bids submitted may be lower than the amount the borrower wants to raise – undersubscribed bonds, or bids may exceed the amount the borrower wants to raise – oversubscribed bonds. Why should issuers pride themselves of having had their bonds oversubscribed? One reason is to let the public know that as a borrower, it is seen by investors as creditworthy. But in reality, is it so much of a positive signal to have your bonds just oversubscribed? My response is no.

It is good to see that investors are interested in lending to you as a body corporate or governmental body, but the truth is an oversubscribed bond merely indicates that the amount offered by lenders to the issuing body (borrower) exceeds the amount that the issuing body intends to raise. The important thing to be concerned about is the interest rate accompanying the bids submitted by the lenders. So, bonds can be oversubscribed but possibly at rates so high that the borrower ends up rejecting most of the bids and going home with funds less than what it sought to raise from the market. And yes, we have seen several of such occurrences in which countries are the issuers.

In simple terms, many issuers can have their bonds oversubscribed at rates that investors feel comfortable to lend to the borrower. It is therefore not necessarily the brightest picture possible to just say ‘my bond was oversubscribed’. At least not until you are able to raise the entire funds at reasonable rates – which is the primary objective of going to the market in the first place.

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Investments

People who invest their Monies Sleep Less

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Living a hassle-free life is the wish of many. A hassle-free life also means you could idle your life into poverty. The key to sustainable enjoyment is to invest, invest and continuously invest. Then you’ll have enough to live on for the rest of your life, hopefully, without hassle. But investing itself doesn’t mean you’ll have enough rest. The sleepless nights and days surely pay off in future.

Looking for investments every time means sacrificing part of your enjoyment and sleep. To find good investments, sometimes you have to travel around, far and near. You must meet people, and look everywhere in an attempt to identify viable opportunities.

Once you put your money in an investment, your work is about to begin. You have to practically monitor your investment every time, especially at the early stages.  You must dedicate your time and sometimes upgrade your skills to be able to nurture and grow the investments, lest they begin to dwindle and disappear before your very eyes.

Losing is part of the game, not all of the game. Investing is not about losing money, it is about making money. However, you’d make losses at some points even if you stay awake every time. It’s part of the learning process. You must make sure you don’t repeat your mistakes and importantly, learn from them.

Like learning, investing is a lifelong path; you never come to an end. You’ll have to go through the cycle of identifying, evaluating, committing funds/time, managing and reinvesting each time. As your portfolio grows, the job becomes bigger. It is at this stage that you must learn to delegate part of the work to trusted hands and professionals, if you want to continue growing. You’ll stay at one place if you think you can do it all by yourself. Learn to trust your wealth in the hands of professionals.

Investing may bring along sleepless nights and tedious days but the rewards are surely gigantic; strong enough to guarantee you more sleep in future than you lost at the beginning.

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Business

You can make Money Trading Commodity Futures and Forex Online

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Forex and commodity futures are traded in trillions on daily basis across the globe. The trade is dominated by banks and other financial institutions, on their own account or on behalf of clients. Fortunately, the market is available to individuals as well, on various trading platforms.

Forex and commodity futures trading can be very rewarding. In Africa, though not as huge in volume as it is in Europe, America and Asia, banks in Ghana, Nigeria and Kenya are raking in millions very year from forex trading. And anyone can make as much if you’re willing to devote yourself to it.

  1. Learn First

The returns one can make from trading forex and commodities online can be refreshingly overwhelming. You can easily make 10% profit on your capital in a single day, sometimes a single trade, if you’re trading on margin. But to be able to do this, you should be ready to learn, learn and never stop learning. If you’re a beginner, don’t be in a hurry to open a live account to start trading. I advise you do a lot of reading around the subject, and master the basics. Understand the market and pick the commodities or currency pairs you want to trade. Then you do further reading. There are tons of learning materials on forex trading and commodity futures trading online.

  1. You’ll Win Some, Not All

You have to be ready to make money. Yes, a lot of money. But this won’t come as easy as opening an account and starting to trade. The risk in forex and commodity trading is very high, and even higher when you trade on margin. But so is the reward. You must psyche yourself first; to win some and lose some. You cannot make profits on every trade. I don’t know any trader who has not recorded losses yet, not even the experts. But my hope is that you win more than you lose.

  1. Choose a good broker

The choice of an online broker sure matters. They make small differences that matter in the end. The price at which you buy and sell (or sell and buy) currency pairs and commodities is what your broker quotes for you. With a lot of white-labeled trading platforms all over the place, some may be adding and deducting 1pip from the price anytime you make a trade. It may appear insignificant but it makes the difference between breakeven and a loss. It also affects your profit or loss, in big-ticket trades. Some brokers also charge you commission on your earnings, whilst others charge on the principal amount credited to your account. Others give high margins whereas some others would give you comparatively low margins, for different reasons. The minimum amount you can start trading with is also determined by your broker and sometimes the size of trades. And all of these would, together, affect your trading in a positive or negative way. Make sure your broker is giving you the best terms.

I’ll continue giving you simplified tips on commodity and forex trading in subsequent posts. Drop a comment if you want explanation on aspects of the subject. Share if you enjoyed this brief. Go make money.

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