http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments How to Choose Profitable Investments The stock market is going up and the real estate market has largely recovered from the crash a decade ago. If you have not already started investing again you are probably thinking about it. If you are new to the game you are wondering how to choose profitable investments. How to Choose Profitable Investments 1: First steps Years ago we wrote about how to invest $10,000. Here are some basics about how to choose profitable investments and get on the road to profits. In deciding how to invest 10,000 dollars let’s look at investment horizon, risk tolerance, growth versus income, and diversification as the first considerations on the way to deciding what is a good investment for our first stock. How we envision our investments will help us focus on the stocks that fit our needs. If we are looking to save money for retirement we may choose different investments than if we are saving for a down payment for a house and hope to have built up a substantial amount of capital in, lets’ say, five years. Our risk tolerance should be built upon our ability to absorb the loss of our investments in their entirety. Someone close to retirement may want to look at dividend stocks more closely than growth stocks and a younger investor will certainly want to cash in on the exponential growth of a strong growing company. Diversification is always important as it lets us benefit from growth in different market sectors and commonly cushions losses in one stock/sector with gains in another. In this article we will focus on investing for the long term, building wealth over the years, and having a healthy nest egg for a rainy day. In this case how to choose profitable investments depends on intrinsic value analysis. How to Choose Profitable Investments 2: Intrinsic value and value investing We may seem to have written a lot about intrinsic stock value but it is a subject that bears repeating. When you look for a profitable investment you do not necessarily look for a stock that has just gone up in price. What you want is an investment that will appreciate in the future. But, how can you know that? There are lots and lots of mathematical formulas which you can apply to the calculation of intrinsic stock value. For example, you can look at expected dividends and pick a stock which has paid dividends for decades and invest with the expectation of continued dividends. Or, you can look at the margin of safety of a stock which is cash in the bank, assets unencumbered by debt, and the strength of its products and services within its market niche. This last approach is basic to how to choose profitable investments.

1. How to Choose
Profitable
Investments
By www.ProfitableInvestingTips.com

2. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
The stock market is going up and the real
estate market has largely recovered from the
crash a decade ago.

3. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
If you have not already started investing
again you are probably thinking about it.

4. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
If you are new to the game you are
wondering how to choose profitable
investments.

5. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
How to Choose Profitable
Investments 1: First steps

6. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Years ago we wrote about how to invest
$10,000.

7. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Here are some basics about how to choose
profitable investments and get on the road to
profits.

8. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
In deciding how to invest 10,000 dollars let’s
look at investment horizon, risk tolerance,
growth versus income, and diversification as
the first considerations on the way to
deciding what is a good investment for our
first stock.

9. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
How we envision our investments will help us
focus on the stocks that fit our needs.

10. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
If we are looking to save money for
retirement we may choose different
investments than if we are saving for a down
payment for a house and hope to have built
up a substantial amount of capital in, lets’
say, five years.

11. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Our risk tolerance should be built upon our
ability to absorb the loss of our investments
in their entirety.

12. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Someone close to retirement may want to
look at dividend stocks more closely than
growth stocks and a younger investor will
certainly want to cash in on the exponential
growth of a strong growing company.

13. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Diversification is always important as it lets
us benefit from growth in different market
sectors and commonly cushions losses in
one stock/sector with gains in another.

14. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
In this article we will focus on investing for
the long term, building wealth over the years,
and having a healthy nest egg for a rainy day.

15. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
In this case how to choose profitable
investments depends on intrinsic value
analysis.

16. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
How to Choose Profitable
Investments 2: Intrinsic value
and value investing

17. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
We may seem to have written a lot
about intrinsic stock value but it is a subject
that bears repeating.

18. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
When you look for a profitable investment
you do not necessarily look for a stock that
has just gone up in price.

19. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
What you want is an investment that will
appreciate in the future.

20. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
But, how can you know that? There are lots
and lots of mathematical formulas which you
can apply to the calculation of intrinsic stock
value.

21. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
For example, you can look at expected
dividends and pick a stock which has paid
dividends for decades and invest with the
expectation of continued dividends.

22. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Or, you can look at the margin of safety of a
stock which is cash in the bank, assets
unencumbered by debt, and the strength of
its products and services within its market
niche.

23. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
This last approach is basic to how to choose
profitable investments.

24. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
How to Choose Profitable
Investments 3: Tech products
versus a Snickers bar

25. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Which companies will be profitable
investments in the future depends on their
ability to make money year in and year out.

26. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
There are two ways this happens. First, the
company has a product, like Clorox bleach,
Coca Cola or a Snickers bar.

27. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
These are established products that have
strong brand names and are very unlikely to
be replaced by competitors.

28. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
The second way is that the company is able
to continue to invent new and better products
and services.

29. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
We like to refer to Warren Buffett on these
pages because he is the epitome of the
successful long term investor.

30. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
He once said that he avoided tech stocks
because he did not have a clear idea of how
many of their products would be viable in five
years and therefore how much they would be
worth.

31. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
On the other hand he noted that he was
pretty sure how much folks would pay for a
Snickers bar five years in the future.

32. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
For the beginner, how to choose profitable
investments is to stick with what you know or
educate yourself to know more.

33. http://profitableinvestingtips.com/profitable-investing-tips/how-to-choose-profitable-investments
Having a basic idea of how the company
makes its money and how it will continue to
do so is the first, best and eternal approach
to profitable investing.