Profitable investment , hearing this word will be fascinating for all of us. Few people are not looking for a way to earn a lot of money.
Profitable investment, what investment can make a big profit for a trader? Contrary to many people’s beliefs, profitable investments require a great deal of expertise or initial capital.
If you are one of these people, then we suggest “How to invest with little money?” Take a look. (Please refer to the topic of how to invest with little money)
You do not want to be frustrated if you cannot get the right pitch so invest in a good capo . For a profitable and successful investment , you also need to know capital management.
Today, investing in sanctions and inflation is critical to maintaining purchasing power. Existing inflation reduces the purchasing power of individuals every year and devalues the domestic currency.
Investing is a good way to compensate for the losses caused by sanctions and inflation. When making a profitable investment, one must increase the money supply faster than the rate of inflation growth and the devaluation of money.
The importance of profitable investment in life:
Investing is a step towards building a better future. Having a job and your own income can only meet the basic needs of life. But to have a good future , you need a profitable investment with a good income.
Everyone wants a good life for their future and strives to achieve it. Also, psychologists believe that investing gives a person hope for the future; Because investing is a sign that one is not anticipating bad things for one’s future. Now, what are the criteria for this good life? The financial and economic criterion is one of the criteria necessary to build the expected future.
There are different ways to make a profitable investment . It is up to the individual to decide in which market to invest his capital. Different types of markets and analyzes have made it difficult to choose a way to make a profitable investment . We have prepared this material for you so that you can have a sufficient knowledge and better understanding of the markets and the subject of investment.
Long-term and short-term investment:
The important question is, where do you start for a profitable investment ?
The most important difference between these two types of investments is time. The time period for short-term investment is finally 5 years. During this period, the investor is expected to have obtained the desired and expected return on capital. To make a successful investment and make the desired profit, you need to set your time horizon. He then invested accordingly.
But the ideal time frame for long-term investment is between 10 and 20 years. Investing is like growing a perennial plant. The more time you spend on it, the better it will grow and the more profit you will make.
In long-term investment, the investor ignores cross-sectional fluctuations.
Which time horizon is best for profitable investment ?
The time horizon for profitable investment should be chosen based on the personality, motivation and goal of the individual. To choose the right time horizon, you need to set goals, and to set goals, you need to know exactly what you are looking for.
You can make both types of investments at the same time, and this is what we recommend. But your short-term goals need to be in line with your long-term goals. In fact, make your long-term goals consist of several short-term goals.
For example, your short-term investment goal could be to buy basic goods such as household items or dowry, and your long-term goal is to buy enough housing or savings for retirement. In general, investors can be divided into two types of personality types.
The right way to make a profitable investment :
Profitable and risk-free investment is a dream come true. Investing in big profits without taking risks does not seem wise.
For a successful investment, you must first have a rich mind to be able to increase the return and management of capital. We all have people around us who have been able to take advantage of opportunities with little capital and make huge profits with the right management. On the contrary, we have seen many people who have invested in different ways and have suffered a lot of losses.
The difference between these people is in the type of thinking and their rich minds. In order to achieve the desired profit, it is necessary to have a rich mind, to be able to manage your capital to maintain the original money. What does capital management mean? Below is a definition of capital management.
Capital management for a profitable investment :
Capital management helps you reduce the level of risk in capital. When making a profitable investment , do not let clutter like money get in the way.
Capital management is a guarantee for the maintenance and growth of your capital. To make a profitable investment, you must have a systematic practice and conscious and rational thinking. In this way, you need to place a certain value on your money and capital, and anticipate and consciously accept the market risk you intend to invest in.
Capital management is an art and a knowledge. For this art you need to have a high return on your capital with minimal risk; Because our main goal in investing in the first place should be to preserve capital and control risk. In capital management, you have to take some risk to prevent large losses in the future.
For a profitable and successful investment , it is not possible to write a single version for everyone; Because investors have different views on investing.
Inflation forecasting is an important principle for profitable investment :
It is a bit difficult to invest in an inflationary country. In the case of inflation, if your profit percentage is less than the inflation rate, your return will be negative. That’s why you need to anticipate inflation before making any decision.
A profitable investment should have the following characteristics:
- Capital must have high liquidity; That is, you can convert capital into cash in a matter of days.
- A profitable investment should give you at least 50% profit per year.
- Make sure it is legal; You do not need to get a license for it or take special measures.
- It should be such that you can invest with little money.
So far we have tried to get acquainted with the necessary and basic concepts and definitions to get a general understanding of profitable investment. Now we are going to look at a profitable investment in the capital market.
The stock market is a profitable investment and requires skills:
You do not need a lot of capital and money to invest in the stock market, and you can enter this market with 500 thousand tomans. To invest in the stock market, it is better to use your stagnant money. For example, bank deposit money or money that you do not need for the short term and in the near future. Never enter the stock market with money that is one of the main foundations of life.
In the past, they had to trade in person and buy stocks in person. But today, trading in the stock market has become much easier and anyone can trade by receiving the stock code.
The transparency of this market allows you to buy and sell daily and check your stock price. You can even easily see the supply and demand on a daily basis.
To be successful in this market, you need to first acquire the knowledge and skills of trading.
What are the principles necessary for success in the capital market and the stock market?
- You should not be biased towards a stock and whenever you notice a mistake in a serious transaction, leave the transaction before the loss increases.
- Be compassionate about your capital. Do not buy a stock until it has been fully reviewed.
- Plan to buy stocks. Try to clearly define your goal and time horizon.
- Prefer long-term investments to short-term investments.
- Do not go to the well with anyone’s rope. Do not pay anyone to receive sales information and signals. Spend this money on training and skills development.
How to implement capital management in the capital market and stock buying to have a profitable investment ?
To succeed and manage capital in the market, there are the following criteria that it is necessary to know their definitions before entering the market:
- Daily and monthly trading volume
- Ratio to risk ratio
- Capital loss ratio
To be successful and sustainable in this market, you need to thoroughly research these items before entering it. After reviewing these items, you can determine the appropriate point for entering or leaving the share by determining the profit and loss limit. This is an important principle in capital management.
To be successful in investing in the stock market, you must adhere to the following rules:
- Determine your expected risk and return from buying that stock before making any trade.
- By calculating risk and return, potential exit points and trading volume can be calculated.
- The maximum amount of risk in each trading position should not exceed 3%.
- Your risk-return ratio should be at least 1%. Otherwise this transaction is wrong.
- If you decide to do multiple trading opportunities, split the maximum risk between your trades.
- To have an astronomical profit, consider its heavy risk.
What are the benefits of investing in the stock market?
- Wandering and stagnant capitals are directed towards a targeted capital.
- Entering this market does not require much capital or money. Small investors can participate in large investments with little money.
- The stock market is a permanent market that allows investors to invest in this market with a short-term or long-term horizon.
- Depending on the risk level of the investors, there are different securities with different returns for the investor.
- There are two ways to earn money in the stock market. In the first method, companies distribute a portion of the profits from the sale of services and products among shareholders. This profit is paid to the shareholders’ accounts on an annual basis. The second method is revenue from rising stock prices over time.
- High liquidity in the stock market allows the investor to access some of the original money or the total capital by selling shares whenever he feels the need for cash.
- All stock exchange transactions are conducted under the supervision of a regulatory body called the Stock Exchange and Securities Organization. Companies that intend to enter the stock market must commit to periodically provide authorized information about the company and transactions to buyers. For this reason, the stock market is highly transparent.
The stock exchange is available anywhere and anytime and you will be able to trade. It does not matter where you live in Iran, you just need to connect your device to the Internet to be able to do whatever you want.
Finally, do not look at investing in the stock market as a first job and a source of monthly income.