Have you taken the time to consider your financial goals in terms of investing?
Financial investing has a lot to do with what is available, such as stocks and bonds. However, it also has a lot to do with the overall risks you are willing to take and the type of investor that you are. When you take a close look at financial management options available to you, it is important to consider what your goals are and what types of investments you are best suited for.
Some investors have very well defined investing methods. They know just what they are looking for and they see the decisions they need to make in black and white. On the other hand, some highly successful financial investors do not have a strategy that is set in stone. Some of the less successful investors would have a hard time making decisions because they are not sure where they are going or how they will get there.
Take some time to consider a few important elements of this. Learn what your options are and how you can define your goals better.
- Do you like to purchase stocks at a low price and then sell them quickly, even within a week or so, when the price has increased? If this is how you would define yourself, you are a trader rather than an investor. You likely do not spend a lot of time researching the stocks before you buy them but rather go the options that you have.
- Investors, on the other hand, spend a great deal of time learning as much as they can about the stocks they are likely to purchase. They also hold on to these stocks for at least a few months, if not longer, before they sell them at a higher price.
If you are an investor, then you can further clarify yourself as a value investor or a growth investor. If you are a value investor, this means that you are looking for a good deal in the market. You want to find a good company to invest with who just happens to have stock prices that are lower than what they normally are or what they are likely to be in the future. If you are this type of investor, then you will want to use a wide range of factors to help you determine if a stock is a good investment including the P/E ratio and book value.
If you are a growth investor, then you are looking for companies that are growing, with accelerated revenue and earnings. You look at things like the earnings growth ratio and the revenue growth rate when making a decision about which stock to invest in.
What difference does all of this make to you? If you define the type of investor you are, you can make
financial management decisions that fit better into your goals. Financial investing is never an easy process, but it can be highly successful with clear goals.
