11 TIPS TO MAKE YOU A BETTER INVESTOR
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Don't invest in another dollar without reading this
1) Understand the investment
What do they do? How do they make money?
Why are they important? What are their products?
Positives? Strengths? Moat? Advantages?
Opportunities? Growth? Catalysts?
Downside? Negatives? Weaknesses?
Threats?
Risks?
Understand all of this
2) Assess the financial health
Is the company financially healthy? Are financials strong? Are cash flows from operations positive? How are Investing & Financing Cash-flows? Are net income & EPS growing? Are profit margins increasing? Is quick ratio over 2 to sustain operations?
3) Management Assessment:
A strong management team with a track record of success is important. Check Glassdoor & Indeed to learn about the management of the company, and google their CEO.
Does the CEO have a history of successfully leading companies & driving growth?
4) Insider Activity:
Is the CEO or management buying or selling shares? Insiders like the CEO and management have access to information that may not be available to the public. When insiders buy or sell. it can signal confidence or lack of confidence in the company's future.
5) Revenue & Earnings Evaluation:
Look for trends in revenue & earnings growth over time. Has the company grown its revenue & earnings over the past several years, or has performance been volatile or flat? Review its record of beating, meeting or missing earnings expectations.
6) Develop a long-term mindset:
Don't get caught up in short-term fluctuations and market volatility. Instead, focus on the long-term trends and try to identify companies that are well-positioned for growth over the coming years. Have conviction.
7) Stay disciplined and don't let your emotions drive your decisions:
Remain calm and level-headed, even during times of market volatility. Don't make impulsive decisions based on fear or greed, Stick to your investment plan, even when faced with market volatility.
8) Don't be afraid to take calculated risks:
While it's important to be cautious, taking on some level of risk is necessary for higher returns. Just be sure to thoroughly assess the potential risks and rewards before making any decisions. No risk, no reward.
9) Always use leverage wisely:
Leverage, or borrowing money to invest, can help you amplify your returns, but it can also increase your risk. Use leverage carefully and make sure you have a solid understanding of the potential risks.
10) Don't be afraid to take profits:
While it's important to stay invested for the long-term, there may be times when it makes sense to sell an investment. Don't be afraid to take profits when you've reached your target return or when you need the money for other purposes.
11) Manage your expectations:
It's important to have realistic expectations about your investment returns. Don't expect to get rich overnight, but also don't be too conservative in your projections.
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