Monday, 3 June 2013

One Great Investment Strategy

All it takes is one great investment strategy to make a big difference to your lifestyle. But how do you find the right one? You can test various methods yourself or you can learn from others. By learning from others who have trialled and tested methods of investment you will save yourself money and time.
You will find various investment opportunities as you research and most are based on the stock market or on property investments. These investments usually focus on either a short term or a long term plan. Investment strategies can also be based on a return on capitol or an income producing result.
Let's look at one example. In the stock market you can buy and sell shares. Most investors prefer to buy blue chip stock. Most hold these stocks for the longer term, and rely on both capitol growth and income from dividends paid. There are various methods of leveraging these investments to produce greater returns than the expected average. The more leverage used the greater the risk undertaken buy the investor. To get better returns by leveraging is relatively easy, but minimising the risk is hard, unless you understand what risks are involved.
If you use a combination of leveraging derivatives such as options and CFD's, (contract for difference), you can effectively minimize your risk. A combination of both these products at the right mix based on blue chip stocks will produce a higher than average return and minimal risk. The exact formula is a complicated one and is dependent on other factors such as volume, volatility, spreads and market timing factors. Other considerations are based on dividend returns and historical data. The full details of this strategy are far too much to fully explain in this article.
The important consideration is that this strategy is possible with the right information and education. When it is put in place it consistently returns a higher than average return with minimal risk. Get educated about your investment area and explore all the associated derivatives and leveraging possibilities.
There are other areas of investment where the same principles apply. By understanding all the choices available to leveraging and applying combinations of risk reducing products and services, an investment strategy can give higher than average returns whilst maintaining minimal risk. That one great strategy is possible and will increase your investment returns.