Moneyfarm’s infographic on the wealthiest people in history inspired us to think about what it takes to build wealth.
According to Moneyfarm, there are many ways to build wealth. Investing is one of them. For example, Warren Buffet made his billions by investing.
So, if you’re not afraid of taking calculated risks like, Warren Buffet when it comes to building your investment portfolio, continue reading to discover how to manage the risks which you take in order to maximize your chances of making a fortune.
How to take risks investing:
- Consider investing in a company which is new to the stock exchange
If you’re interested in doubling or tripling your initial investment, you may want to consider investing in a company which is newly listed on the stock exchange and which could skyrocket in price, in the coming months. Just make sure to research the performance of the company over the last year to see whether its share price is likely to soar before you make an investment.
- Always look at a stock’s statistics before making a sizeable investment
Examples of statistics which are well worth taking into consideration include the recent history of a stock’s share price. In general, it’s worth paying particular attention to a stock’s performance over the last 2 years. As an example, you may find that a stock always increases in price after a small dip and that you’ll be able to make a profit within a short period of time by purchasing a stock for a cheap price, before selling it when it returns to its normal share price.
- Consider talking to an experienced stockbroker to gain valuable insight into the stock market
If you don’t have much experience when it comes to selecting profitable stocks, you may want to consider talking to an experienced stockbroker. As they may be able to help you select the right mix of stocks to build an impressive, profitable investment portfolio.
As a bonus stockbrokers are experts at interpreting stock market trends and can normally predict when the best time is to purchase and sell certain stocks. Which is incredibly important as to succeed as an investor, you have to know when to buy and sell stocks. As simply purchasing the right stocks, won’t necessarily earn you a sizeable profit if you purchase your stocks at the wrong time or choose to sell your stocks at the wrong time.
- Don’t invest too much money in a single investment
If you want to take risks as an investor but you don’t want to risk losing hundreds of thousands of dollars, it’s well worth investing in several different companies, rather than investing hundreds of thousands of dollars into a single investment. Remember, that if you change your mind and would like to invest more money in a particular company, that you’ll be able to make another transaction, once your current investment has proven lucrative.
- Consider investing in an industry that you’re passionate about
As an example, if you’re passionate about property, you may want to consider purchasing an investment property whilst if you’re interested in technology you may be more suited to investing in cryptocurrencies or a tech-related company such as Apple, Amazon, Alibaba or Tesla.
So if you’re keen to take calculated investment risks, it’s well worth considering all of the 5 tips listed above.
