Investment with the objective of creating a substantial asset is ideal. Generally people invest to make money and are often found pondering and confused. All big and successful investors follow the process of investment with a different objective than making money – they invest to build a substantial asset for themselves and the money-making follows. But focusing on making money more than asset creation is not a right approach for investment. It is something like expecting to get a good job without focusing on increasing the quality of your knowledge. A football player creates his asset by practicing and in turn he earns money.
People like Bill gates created an asset like Microsoft and Warren Buffett created Berkshire Hathaway. These assets are so substantial that even outsiders invest in this asset to make money. Of course not every body can be Bill Gates and Warren Buffett but at least we can follow their principles. So my suggestion to a common man is to focus on creating a big asset (Huge investment portfolio) which will eventually make money for them.
It is common to find people who would like to make quick money from stock investment. They want to buy today and sell-quick for profit. This form of stock buying and selling is called as stock trading which can be compared to gambling. But investment is not gambling instead it is a profession. In professional life people work each day to gain knowledge, know-how and experience. As a qualified investor people should focus on the profession of investment. It calls for accumulating assets in the form of value stocks, Best Rated Mutual Funds, deposits, bonds etc (there are plethora of Investment option for you).
Top 5 mistakes of common investors
How to create a substantial asset?
To explain in simple sentence, asset creation can be a simple process of adding a value share into your portfolio. When I say value share I means those shares which are available at a discounted price. Suppose in the past two months I have bought value shares of 5 companies by paying say $1000. The market value of these shares now is say $1200. It means my investment portfolio consists of shares of five companies which has a current market value of $1200. If I decide to sell my 5 shares today, I will make at least $1200 (minus brokerage charges & tax).
The buzzword on creating a substantial asset is to keep a track on the market and upon every dip, put your money-in.
How common investors can invest in the stock market
For a new investor using technical analysis to evaluate shares before adding to their portfolio will be ideal. The idea is simple; one must add any share to their investment portfolio which is over priced. May be the share has a big brand name and excellent past record to boast off its performance. But an overpriced share is worth pea-nuts for investors. A care must be taken not to buy an over prices stock.
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